Q2 2026 Linamar Corp Earnings Call

August 12, 2026

Speaker #1: Good afternoon, ladies and gentlemen, and welcome to the LINAMAR CORP Q2 2026 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session.

Operator: Good afternoon, ladies and gentlemen, and welcome to the LINAMAR CORPORATION Second Quarter 2026 Earnings Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, 12 August 2026. I would now like to turn the conference over to Linda Hasenfratz, Executive Chair of LINAMAR. Please go ahead.

Speaker #1: If at any time during this call you require immediate assistance, please press *0 for the operator. This call is being recorded on Wednesday, August 12, 2026.

Speaker #1: I would now like to turn the conference over to Linda Hasenfratz, Executive Chair of LINAMAR. Please go ahead.

Speaker #2: Thanks so much. Good afternoon, everyone, and welcome to our Q2 conference call. Before I begin, I will draw your attention to the disclaimer that we are currently broadcasting.

Linda Hasenfratz: Thanks so much. Good afternoon, everyone, and welcome to our second quarter conference call. Before I begin, I will draw your attention to the disclaimer that we are currently broadcasting. Joining me this afternoon as usual are Jim Jarrell, our CEO and President, and Dale Schneider, our CFO, both of whom will be addressing the call formally. Also available for questions are Mark Stoddart, Chris Merchant, and other members of our corporate IR, marketing, finance, and legal team. I will start off with some highlights, as usual. A good place to start, always, is a quick reminder of the key value drivers that make Linamar such a great investment and how they played out this past quarter. First, Linamar has a long track record of consistent, sustainable results driving out of our diverse business.

Speaker #2: Joining me this afternoon, as usual, are Jim Jarrell, our CEO and President, and Dale Schneider, our CFO, both of whom will be addressing the call formally.

Speaker #2: Also available for questions are Mark Stoddard, Chris Merchant, and other members of our corporate IR, marketing, finance, and legal team. Okay, I'll start off with some highlights.

Speaker #2: As usual, a good place to start, always, is a quick reminder of the key value drivers that make LINAMAR such a great investment and how they played out this past quarter.

Speaker #2: First, LINAMAR has a long track record of consistent, sustainable results, driving out of our diverse business. And Q2 was another great example of that, with exceptional earnings growth in our mobility business.

Linda Hasenfratz: Q2 was another great example of that with exceptional earnings growth in our mobility business, more than offsetting soft markets in our ag business and other dynamics, such as tariffs more broadly in our industrial businesses. Being invested in both businesses helps trim big swings up and down in individual markets and leaves us with a more consistent, sustainable level of performance. Notably, again this quarter, record sales and close to 10% earnings growth. The second key point is our flexibility to mitigate risk. Our equipment is programmable, flexible equipment. It can be used on a large variety of types of products across different vehicle platforms and types of propulsion. It can also be assigned to our industrial divisions as well as our mobility divisions.

Speaker #2: More than offsetting soft markets in our ag business and other dynamics, such as tariffs more broadly in our industrial businesses. Being invested in both as businesses helps trim big swings up and down in individual markets and leaves us with a more consistent, sustainable level of performance.

Speaker #2: Notably, again, this quarter record sales and close to 10% earnings growth. The second key point is our flexibility to mitigate risk. Our equipment is programmable, flexible equipment.

Speaker #2: It can be used on a large variety of types of products across different vehicle platforms and types of propulsion. It can also be assigned to our industrial divisions as well as our mobility divisions.

Speaker #2: This flexibility is allowing us to reallocate programs or equipment from programs running under capacity to new launches or new areas in the business, which is really critical in this timeframe of changing volumes.

Linda Hasenfratz: This flexibility is allowing us to reallocate equipment from programs running under capacity to new launches or new areas in the business, which is really critical in this timeframe of changing volumes. Third, we have always run a prudent, conservative balance sheet. We target keeping net debt to EBITDA under 1.5x. Q2 saw net debt to EBITDA at 0.52, despite significant investment in CapEx for new programs. Our peers are much more heavily indebted, with net debt to EBITDA more than 2.7x. That makes Linamar much more flexible to chase growth prospects in this opportunistic time, which we absolutely are doing. Lastly, returning cash to shareholders is a key value creation driver at Linamar as well. You saw that play out this quarter with a 10% increase to our dividends, continuing our pattern of regular dividend increases reflective of our strong performance in terms of cash management.

Speaker #2: Third, we've always run a prudent, conservative balance sheet. We target keeping net debt to EBITDA under 1.5 times. Q2 saw net debt to EBITDA at 0.52, despite significant investment in CapEx for new programs.

Speaker #2: Our peers are much more heavily indebted, with net debt to EBITDA more than 2.7 times. That makes LINAMAR much more flexible to chase growth prospects in this opportunistic time, which we absolutely are doing.

Speaker #2: Lastly, returning cash to shareholders is a key value creation driver at Linamar as well. And you saw that play out this quarter with a 10% increase to our dividend, continuing our pattern of regular dividend increases reflective of our strong performance in terms of cash management.

Speaker #2: I also note the continued repurchase of shares in the market, which we have been steadily doing since November of 2024. Okay, turning to financial highlights for the quarter, and highlights more broadly, it's been another excellent record-breaking quarter.

Linda Hasenfratz: I also note the continued repurchase of shares in the market, which we have been steadily doing since November of 2024. Turning to financial highlights for the quarter, and highlights more broadly. It has been another excellent record-breaking quarter, illustrative of a strong strategy that is delivering results for today and tomorrow. We saw record sales in the quarter and strong earnings growth for our overall business. Our mobility business in particular, had an exceptionally strong quarter, delivering record sales and record earnings. In fact, nearly 30% earnings growth. We also saw market share growth in every region, as well as solid new business wins, notably in Canada and the US specifically. We are firing on all cylinders in the mobility segment. This despite global automotive markets being down again in terms of production volumes compared to prior year this quarter.

Speaker #2: Illustrative of a strong strategy that's delivering results for today and tomorrow, we saw record sales in the quarter and strong earnings growth for our overall business.

Speaker #2: Our mobility business, in particular, had an exceptionally strong quarter, delivering record sales and record earnings. In fact, nearly 30% earnings growth. We also saw market share growth in every region, as well as solid new business wins, notably in Canada and the US specifically.

Speaker #2: We are firing on all cylinders in the Mobility segment. And this, despite global automotive markets being down again in terms of production volumes compared to the prior year this quarter.

Speaker #2: And finally, we are managing that tariff minefield very well. Indeed, again, more than 90% of our sales this year are not impacted by tariffs.

Linda Hasenfratz: Finally, we are managing that tariff minefield very well indeed with, again, more than 90% of our sales this year not impacted by tariffs. I will review the tariff situation in a little more detail in a minute. Turning to the numbers, we saw record sales of CAD 3.1 billion, up 18.8% over last year. Sales were up 14% in our industrial business, with access markets growing, offset by continued softness on the ag side. Sales were up 21% in the mobility segment, thanks to recent acquisitions, but also launching business and several programs that are running at stronger volumes than the market as a whole, offsetting those soft markets globally on the light vehicle side.

Speaker #2: I will review the tariff situation in a little more detail in a minute. Turning to the numbers, we saw record sales at $3.1 billion, up 18.8% over last year.

Speaker #2: Sales were up 14% in our Industrial business, with Access markets growing, offset by continued softness on the Ag side. Sales were up 21% in the Mobility segment, thanks to recent acquisitions, but also launching business and several programs that are running at stronger volumes than the market as a whole.

Speaker #2: Offsetting those soft markets globally on the light vehicle side. Normalized net earnings were 183 million, or 5.8% of sales. Up 8.7% over last year.

Linda Hasenfratz: Normalized net earnings were CAD 183 million, or 5.8% of sales, up 8.7% over last year, and normalized EPS was CAD 3.08, up 9.6% over last year on the back of a very strong mobility segment performance. Finally, free cash flow was again excellent at nearly CAD 240 million. Strong cash flow drove from those strong earnings and continued focus on reallocating capital to control our CapEx spending. I would summarize our results this quarter as being most impacted by recent acquisitions adding to top and bottom line, launches and strong production sales in mobility and growth in Skyjack sales. Great continued efficiency and productivity improvements, all of which was offset by negative impact of tariffs in the industrial group and the negative impact of FX, the majority related to a weaker US dollar in comparison to both the Canadian dollar and the peso, as well as those weak agricultural markets.

Speaker #2: And normalized EPS was 308, up 9.6% over last year on the back of a very strong mobility segment performance. And finally, free cash flow was again excellent at nearly 240 million dollars, strong cash flow drove from those strong earnings, and continued focus on reallocating capital to control our CapEx spending.

Speaker #2: I would summarize our results this quarter as being most impacted by recent acquisitions, adding to top and bottom line, launches and strong production sales in mobility, and growth in SkyJet sales.

Linda Hasenfratz: Great continued efficiency and productivity improvements, all of which was offset by negative impact of tariffs in the industrial group and the negative impact of FX, the majority related to a weaker US dollar in comparison to both the Canadian dollar and the peso, as well as those weak agricultural markets. Okay, let's have a look at an update on the tariff side. I mentioned a moment ago, more than 90% of our sales this year are not impacted by any tariffs, and I think that is the most important takeaway for you on tariffs. The new Section 232 tariff scheme that came into effect 1 April on metal product derivatives are definitely creating a bigger impact to certain products in our industrial business than the previous scheme. 25% tariffs on full equipment value versus 50% on only the non-US metal is, of course, quite different.

Speaker #2: Great continued efficiency and productivity improvements, all of which was offset by the negative impact of tariffs in the Industrial group and the negative impact of FX.

Speaker #2: The majority related to a weaker US dollar in comparison to both the Canadian dollar and the peso, as well as those weak agricultural markets.

Speaker #2: Okay, let's have a look at an update on the tariffs side. So, as mentioned a moment ago, more than 90% of our sales this year are not impacted by any tariffs.

Linda Hasenfratz: Okay, let's have a look at an update on the tariff side. I mentioned a moment ago, more than 90% of our sales this year are not impacted by any tariffs, and I think that is the most important takeaway for you on tariffs. The new Section 232 tariff scheme that came into effect 1 April on metal product derivatives are definitely creating a bigger impact to certain products in our industrial business than the previous scheme. 25% tariffs on full equipment value versus 50% on only the non-US metal is, of course, quite different. But the good news is the tariffs are only impacting select products in the industrial segment and not impacting the auto side of the business at all.

Speaker #2: And I think that is the most important takeaway for you on tariffs. The new Q3, Q2 tariff scheme that came into effect April 1st on metal product derivatives are definitely creating a bigger impact to certain products in our industrial business than the previous scheme.

Speaker #2: A 25% tariff on the full equipment value versus 50% on only the non-US metal is, of course, quite different. But the good news is the tariffs are only impacting select products in the Industrial segment, and not impacting the Auto side of the business at all.

Linda Hasenfratz: But the good news is the tariffs are only impacting select products in the industrial segment and not impacting the auto side of the business at all. The impact on the sales that are subject to these tariffs is, of course, detracting from our earnings growth this year, as you saw illustrated in the industrial segment results this quarter, but is diluted in our overall results by our strong mobility earnings. I will highlight the tariff impact expected for the next two quarters will certainly be less acute than we saw in Q2. Q2 is our strongest quarter seasonally for all of our industrial businesses, meaning it will experience the biggest tariff impact for the year. We continue to fully expect to grow earnings to new record levels this year, as Dale Schneider will shortly outline for you in our outlook.

Speaker #2: The impact on the sales that are subject to these tariffs is, of course, detracting from our earnings growth this year, as you saw. It was illustrated in the Industrial segment results this quarter.

Linda Hasenfratz: The impact on the sales that are subject to these tariffs is, of course, detracting from our earnings growth this year, as you saw illustrated in the industrial segment results this quarter, but is diluted in our overall results by our strong mobility earnings. I will highlight the tariff impact expected for the next two quarters will certainly be less acute than we saw in Q2. Q2 is our strongest quarter seasonally for all of our industrial businesses, meaning it will experience the biggest tariff impact for the year. We continue to fully expect to grow earnings to new record levels this year, as Dale Schneider will shortly outline for you in our outlook. Meanwhile, we're working on various mitigation strategies to minimize the impact of the tariff, as Jim Jarrell will outline for you.

Speaker #2: But is diluted in our overall results by our strong mobility earnings. I will highlight that tariff impacts expected for the next two quarters. We'll certainly be less acute than we saw in Q2.

Speaker #2: Q2 is our strongest quarter seasonally for all of our industrial businesses, meaning it will experience the biggest tariff impact for the year. We continue to fully expect to grow earnings to new record levels this year, as Dale will shortly outline for you in our outlook.

Speaker #2: Meanwhile, we're working on various mitigation strategies to minimize the impact of the tariffs, as Jim will outline for you. I will also note that the new Section 338 tariff scheduled to take effect mid-August does not impact our markets.

Linda Hasenfratz: Meanwhile, we're working on various mitigation strategies to minimize the impact of the tariff, as Jim Jarrell will outline for you. I will also note that the new Section 301 tariff, scheduled to take effect mid-August, do not impact our market or our products. I think this is another great example of the benefit of a diverse business. When all your eggs are in one basket, you are more vulnerable to specific dynamics in that industry. When you have multiple revenue streams, those same dynamics are not impacting all areas of your business. They also, of course, have a little bit different economic cycles. All of that helps to ensure a more consistent, sustainable level of growth as you have seen us deliver quarter after quarter and year after year here at Linamar.

Linda Hasenfratz: I will also note that the new Section 301 tariff, scheduled to take effect mid-August, do not impact our market or our products. I think this is another great example of the benefit of a diverse business. When all your eggs are in one basket, you are more vulnerable to specific dynamics in that industry. When you have multiple revenue streams, those same dynamics are not impacting all areas of your business. They also, of course, have a little bit different economic cycles. All of that helps to ensure a more consistent, sustainable level of growth as you have seen us deliver quarter after quarter and year after year here at Linamar.

Speaker #2: Or our products. I think this is another great example of the benefit of a diverse business. When all your eggs are in one basket, you are more vulnerable to specific dynamics in that industry. When you have multiple revenue streams, those same dynamics are not impacting all areas of your business.

Speaker #2: They also of course have a little bit different economic cycles. All of that helps to ensure a more consistent, sustainable level of growth as you have seen us deliver quarter after quarter and year after year here at LINAMAR.

Speaker #2: Okay, I'll take a moment to also reflect on the impact of the decision by the U.S. on July 1st to not support an amendment to the USMCA agreement that would have both extended the agreement to 2042 from its current expiry date of 2036 and eliminated the need for annual reviews during that period.

Linda Hasenfratz: Okay, I will take a moment to also reflect on the impact of the decision by the US on 1 July to not support an amendment to the United States-Mexico-Canada Agreement that would have both extended the agreement to 2042 from its current expiry date of 2036 and eliminated the need for annual reviews during that period. In short, there is little to no impact to the trade agreement or any of the three countries of the US, Mexico, or Canada from this decision from the US. I think there has been widespread misunderstanding of what is happening with United States-Mexico-Canada Agreement, which I hope this chart helps clear up for you. Some folks think United States-Mexico-Canada Agreement was not renewed by the US. That is not correct. First, the agreement wasn't up for a renewal. There was a proposed amendment on the table which wasn't adopted.

Speaker #2: In short, there is little to no impact to the trade agreement or any of the three countries of the US, Mexico, or Canada from this decision of the from the US.

Speaker #2: I think there's been widespread misunderstanding of what is happening with USMCA, which I hope this chart helps clear up for you. Some folks think USMCA was not renewed by the US.

Speaker #2: That is not correct. First, the agreement wasn't up for a renewal. There was a proposed amendment on the table, which wasn't adopted. Second, the decision by the US to not amend the agreement did not impact the current agreement in any way.

Linda Hasenfratz: Second, the decision by the US to not amend the agreement did not impact the current agreement in any way. United States-Mexico-Canada Agreement is still fully in force and will continue until at least 2036. United States-Mexico-Canada Agreement is currently expected to continue, as noted, for at least another 10 years until 2036, and in my opinion, will continue well beyond that, simply because the agreement has created enormous efficiency and prosperity for all three countries and what is a largely well-balanced trade portfolio, in particular between Canada and the US. The US has not notified of its intent to pull out of or terminate United States-Mexico-Canada Agreement in any way, and in my opinion, will not do so. The agreement is too important to too many businesses in the US and the vast majority of states to not continue.

Speaker #2: USMCA is still fully enforced and will continue until at least 2036. USMCA is currently expected to continue as noted for at least another 10 years until 2036.

Speaker #2: And in my opinion, we'll continue well beyond that, simply because the agreement has created enormous efficiency and prosperity for all three countries. And what is a largely well-balanced trade portfolio in particular between Canada and the US.

Speaker #2: The US has not notified of its intent to pull out of or terminate USMCA in any way. And in my opinion, will not do so.

Speaker #2: The agreement is too important to too many businesses in the US and the vast majority of states to not continue. Further, regardless of the fact that the amendment wasn't supported, the agreement can obviously be amended for further extension, or anything else, including forgetting the annual reviews at any time, with the agreement of all three parties.

Linda Hasenfratz: Further, regardless of the fact that the amendment wasn't supported, the agreement can obviously be amended for further extension or anything else, including forgetting the annual reviews at any time with the agreement of all three parties. I, in fact, believe that will happen as well. On the positive side, we are continuing to see customers looking at onshoring into North America parts and systems that they are currently buying from Asia or Europe. We are building up a significant list of new business opportunities and business wins for our North American plants in all of Canada, the US, and Mexico. New business wins and quoting activity is quite strong in all regions. We are seeing continued very strong new business wins for our Canadian plants, continuing the momentum after a very strong year in 2025.

Speaker #2: And I, in fact, believe that will happen as well. On the positive side, we are continuing to see customers looking at onshoring into North America parts and systems that they are currently buying from Asia or Europe.

Speaker #2: We are building up a significant list of new business opportunities and business wins for our North American plants in all of Canada, the US, and Mexico.

Speaker #2: New business wins and quoting activity are quite strong in all regions. We're seeing continued, very strong new business wins for our Canadian plants, continuing the momentum after a very strong year in 2025.

Speaker #2: So far this year, we have won quite a significant amount of business for our Canadian plants. In fact, we have already won 90% of the value of the full year of new business wins last year for the Canadian plants, and we're only halfway through the year.

Linda Hasenfratz: So far this year, we have won quite a significant amount of business for our Canadian plants. In fact, we have already won 90% of the value of the full year of new business wins last year for the Canadian plants, and we are only halfway through the year. 2025, I will remind you, saw the highest level of business wins in Canada that we have seen in the last 3 years. Our strong, highly capable Canadian plants are punching way above their weight in terms of wins compared to their slice of our global footprint, which is great to see. We are also seeing great opportunities for our US plants, particularly our newest acquisition, Aludyne, but also for our other existing American facilities. US new business wins are already at the total value of new business wins in all of 2025. Again, only halfway through the year.

Speaker #2: And 2025, I will remind you, saw the highest level of business wins in Canada that we've seen in the last three years. Our strong, highly capable Canadian plants are punching way above their weight in terms of wins compared to their slice of our global footprint, which is great to see.

Speaker #2: We're also seeing plants, particularly our newest acquisition, Aludine, but also for our other existing American facilities. US new business wins are already at the total value of new business wins in all of 2025, again, only halfway through the year.

Speaker #2: I think it's key to note as well that our portfolio expansion, notably into additional structural components, is dramatically increasing RFQ activity. This strategy has played out very positively for us.

Linda Hasenfratz: I think it is key to note as well that our portfolio expansion, notably into additional structural components, is dramatically increasing RFQ activity. This strategy has played out very positively for us. The tariff situation is also adding to stress in an already stressed supplier base, notably in the US and Europe, which has, as you have seen, led to acquisition opportunities for us. We have so far completed 3 distressed acquisitions over the last 3 years. Finally, I would like to again emphasize that our strong results and positive outlook is very much a result of what I think is an excellent and unique business culture at Linamar. Our culture has been fine-tuned over the last 60 years to be opportunistic, entrepreneurial, and find something positive and actionable to grow our business, regardless of the circumstances. We are naturally responsive, nimble, and move fast.

Speaker #2: The tariff situation is also adding to stress in an already stressed supplier base, notably in the US and Europe, which has, as you have seen, led to acquisition opportunities for us.

Speaker #2: We have so far complete completed three distressed acquisitions over the last three years. Finally, I would like to again emphasize that our strong results of positive outlook is very much a result of what I think is an excellent and unique business culture at LINAMAR.

Speaker #2: Our culture has been fine-tuned over the last 60 years to be opportunistic, entrepreneurial, and to find something positive and actionable to grow our business, regardless of the circumstances.

Speaker #2: We are naturally responsive, nimble, and move fast. We're innovative and creative in dealmaking and mitigating challenging situations and we get things done. Those are the critical elements to not just survive, but to thrive in a challenging time like what we're experiencing.

Linda Hasenfratz: We are innovative and creative in deal-making and mitigating challenging situations, and we get things done. Those are the critical elements, not just to survive, but to thrive in a challenging time like what we are experiencing. With that, I am going to turn it over to our CEO, Jim Jarrell, to review industry and operation updates in a little more detail. Over to you, Jim.

Speaker #2: So with that, I'm going to turn it over to our CEO, Jim Jarrell, to review industry and operations updates in a little more detail.

Speaker #2: Over to you, Jim.

Speaker #1: Thanks, Linda. And great to be with everyone listening here tonight. As we've reflect on the first half of '26, one word stands out to us, which is grit.

Jim Jarrell: Thanks, Linda, and great to be with everyone listening here tonight. As we reflect on the H1 of 2026, one word stands out to us, which is GRIT. We delivered record quarterly sales of more than CAD 3 billion and record operating earnings in mobility. Importantly, these results were not driven by a single market customer or short-term tailwind. They were the product of disciplined execution across a diversified global platform. What makes these results particularly meaningful is the environment in which we were achieving them. We continue to navigate uneven demand, trade uncertainty, and cost pressures. Yet, like a well-built ship moving confidently through rough seas, Linamar continues to advance because of our strength of our operating model, the resilience of our teammates, and the diversity of our business.

Speaker #1: We delivered record quarterly sales of more than $3 billion and record operating earnings in Mobility. Importantly, these results were not driven by a single market, customer, or short-term tailwind.

Speaker #1: They were the product of discipline, execution across a diversified global platform. What makes these results particularly meaningful is the environment in which we were achieving them.

Speaker #1: We continue to navigate uneven demand, trade uncertainty, and cost pressures. Yet, like a well-built ship moving confidently through rough seas, Linamar continues to advance because of the strength of our operating model, the resilience of our teammates, and the diversity of our business.

Speaker #1: Across the organization, we are seeing the benefits of scale, operational excellence, commercial discipline, and strategic acquisitions translating into strong earnings and cash flow. At the same time, we continue to win new business, reinforcing the value of our technology, our manufacturing footprint, and long-standing customer relationships.

Jim Jarrell: Across the organization, we are seeing the benefits of scale, operational excellence, commercial discipline, and strategic acquisitions translating into strong earnings and cash flow. At the same time, we continue to win new business, reinforcing the value of our technology, our manufacturing footprint, and long-standing customer relationships. We are also maintaining a balanced approach to capital allocation, returning cash to shareholders, investing for future growth, and preserving a strong balance sheet that provides flexibility in uncertain times. Ultimately, these records are not the goal, they are the outcome. They are the evidence that our GRIT strategy is working. Growth in revenue, income, and our team continues to build the foundation for sustainable long-term value creation. Records are milestones. They are not our destination. They simply confirm that our GRIT is moving Linamar in the right direction.

Speaker #1: We are also maintaining a balanced approach to capital allocation, returning cash to shareholders' investing for future growth, and preserving a strong balance sheet that perverts provides flexibility in uncertain times.

Speaker #1: Ultimately, these records are not the goal; they are the outcome. They are the evidence that our GRIT strategy is working. Growth in revenue, income, and our team continues to build the foundation for sustainable, long-term value creation.

Speaker #1: Records are milestones. They're not our destination; they simply confirm that our grit is moving Linamar in the right direction. Okay. As we are all aware, Linda mentioned tariffs are causing a lot of uncertainty in global trade markets, impacting business decisions, performance, and the overall economy.

Jim Jarrell: They simply confirm that our GRIT is moving Linamar in the right direction. As we are all aware, Linda mentioned tariffs are causing a lot of uncertainty in global trade markets, impacting business decisions, performance, and the overall economy. It takes GRIT to deal with these tariffs and geopolitical issues, and we continue to proactively mitigate tariff impacts through practical, no-regret actions that improve our competitive regardless of how the tariff environment evolves. We look at everything and anything to improve the situation, including regulatory and class reviews, distribution and structural optimization, target operational actions using our footprints, supply chain rebalancing, cost actions, including supplier pricing, rebates, resourcing adjustments, and really disciplined commercial actions.

Jim Jarrell: As we are all aware, Linda mentioned tariffs are causing a lot of uncertainty in global trade markets, impacting business decisions, performance, and the overall economy. It takes GRIT to deal with these tariffs and geopolitical issues, and we continue to proactively mitigate tariff impacts through practical, no-regret actions that improve our competitive regardless of how the tariff environment evolves. We look at everything and anything to improve the situation, including regulatory and class reviews, distribution and structural optimization, target operational actions using our footprints, supply chain rebalancing, cost actions, including supplier pricing, rebates, resourcing adjustments, and really disciplined commercial actions. Importantly, these initiatives do not require significant capital investment, any facility closures, major restructuring, or disruptive operational changes. We believe these targeted actions will help minimize tariff exposure while supporting continued growth, profitability, and cash flow generation.

Speaker #1: It takes grit to deal with these tariffs and geopolitical issues and we continue to proactively mitigate tariff impacts through practical, no regret actions that improve our competitiveness regardless of how the tariff environment evolves.

Speaker #1: We look at everything and anything to improve the situation including regulatory and class reviews, distribution and structural optimization, target operational actions using our footprints, supply chain rebalancing, cost actions including supplier pricing, rebates, resourcing adjustments, and really disciplined commercial actions.

Jim Jarrell: Importantly, these initiatives do not require significant capital investment, any facility closures, major restructuring, or disruptive operational changes. We believe these targeted actions will help minimize tariff exposure while supporting continued growth, profitability, and cash flow generation. Several of the measures are already in place, while others are actively underway, and we continue to weigh other additional measures as we continue to manage this environment to protect long-term value. This is not a static situation. Things are consistently changing and will improve as clarity improves. Let's turn to Skyjack. What was another great outstanding quarter for us. Despite ongoing tariff and market uncertainty, Skyjack delivered exceptional growth with volumes up 46% in the quarter and 53% year to date.

Speaker #1: Importantly, these initiatives do not require significant capital investment, any facility closures major restructuring or disruptive operational changes. We believe these targeted actions will help minimize tariff exposure while supporting continued growth, profitability, and cash flow generation.

Speaker #1: Several of the measures are already in place, while others are actively underway. We continue to weigh additional measures as we manage this environment to protect long-term value.

Jim Jarrell: Several of the measures are already in place, while others are actively underway, and we continue to weigh other additional measures as we continue to manage this environment to protect long-term value. This is not a static situation. Things are consistently changing and will improve as clarity improves. Let's turn to Skyjack. What was another great outstanding quarter for us. Despite ongoing tariff and market uncertainty, Skyjack delivered exceptional growth with volumes up 46% in the quarter and 53% year to date. Growth was broad-based across all major regions and product categories, demonstrating the strength of our brand, our execution, and our customer relationships. Even more encouraging, the industry outlook has improved dramatically since last quarter.

Speaker #1: This is not a static situation. Things are consistently changing and will improve as clarity improves. Okay. Let's turn to Skyjack. What was another great outstanding quarter for us despite ongoing tariff and market uncertainty?

Speaker #1: Skyjack delivered exceptional growth with volumes up 46% in the quarter and 53% year to date. Growth was bought broad-based across all major reasons regions and product categories.

Jim Jarrell: Growth was broad-based across all major regions and product categories, demonstrating the strength of our brand, our execution, and our customer relationships. Even more encouraging, the industry outlook has improved dramatically since last quarter. What was expected to be a declining global market is now forecast to grow nearly 14% in 2026, driven by strong demand from data center construction, infrastructure investment, and continued fleet expansion by rental companies. Looking ahead, industry forecasts suggest growth moderates in 2027 but remains positive across all major regions. Importantly, the underlying drivers supporting demand today, including data centers, infrastructure, housing, and industrial construction, remain firmly in place, providing a constructive backdrop for continued growth.

Speaker #1: Demonstrating the strength of our brand, our execution, and our customer relationships. Even more encouraging, the industry outlook has improved dramatically since last quarter. What was expected to be a declining global market is now forecast to grow nearly 14% in '26, driven by strong demand from data center construction, infrastructure investment, and continued fleet expansion by rental companies.

Jim Jarrell: What was expected to be a declining global market is now forecast to grow nearly 14% in 2026, driven by strong demand from data center construction, infrastructure investment, and continued fleet expansion by rental companies. Looking ahead, industry forecasts suggest growth moderates in 2027 but remains positive across all major regions. Importantly, the underlying drivers supporting demand today, including data centers, infrastructure, housing, and industrial construction, remain firmly in place, providing a constructive backdrop for continued growth. While product mix always influences revenue performance, the bigger story is pretty clear. Skyjack is winning. We are strengthening our competitive position, gaining momentum in key markets, and capitalizing on attractive long-term growth drivers around the world. Innovation continues to be a key differentiator. During the quarter, we launched the SJ6940 RTE, setting a new benchmark in compact rough terrain electric scissors.

Speaker #1: Looking ahead, industry forecasts suggest growth moderates in ’27, but remains positive across all major regions. Importantly, the underlying drivers supporting demand today—including data centers, infrastructure, housing, and industrial construction—remain firmly in place, providing a constructive backdrop for continued growth.

Speaker #1: While product mix always influences revenue performance, the bigger story is pretty clear: Skyjack is winning. We're strengthening our competitive position, gaining momentum in key markets, and capitalizing on attractive long-term growth drivers around the world.

Jim Jarrell: While product mix always influences revenue performance, the bigger story is pretty clear. Skyjack is winning. We are strengthening our competitive position, gaining momentum in key markets, and capitalizing on attractive long-term growth drivers around the world. Innovation continues to be a key differentiator. During the quarter, we launched the SJ6940 RTE, setting a new benchmark in compact rough terrain electric scissors. We were also proud to see the LanyardGO receive the Best New Product Award at the HIRE26 event in Australia, recognizing Skyjack's continued leadership in innovation, productivity, and safety. The combination of strong execution, market recovery, and product leadership positions Skyjack exceptionally well for continued growth.

Speaker #1: Innovation continues to be a key differentiator. During the quarter, we launched the 6J6940 RTE, setting a new benchmark in compact rough terrain electric scissors.

Speaker #1: We were also proud to see the Lanyard Go receive the Best New Product Award at the Higher '26 event in Australia, recognizing Skyjack's continued leadership and innovation, productivity, and safety.

Jim Jarrell: We were also proud to see the LanyardGO receive the Best New Product Award at the HIRE26 event in Australia, recognizing Skyjack's continued leadership in innovation, productivity, and safety. The combination of strong execution, market recovery, and product leadership positions Skyjack exceptionally well for continued growth. Skyjack isn't just participating in recovery, it's helping to lead it. Turning to agriculture, market conditions remain challenging, with industry demand expected to be down approximately 15% in North America, with Europe and the rest of the world flat to marginally down for the year. Despite that backdrop, all three of our brands continue to gain market share on key product lines. MacDon increased global windrower share. Salford continued to grow its tillage position, and Bourgault gained share in the U.S. air seeder market. In a down cycle, that's the ultimate proof point.

Speaker #1: The combination of strong execution, market recovery, and product leadership has positioned Skyjack exceptionally well for continued growth. Skyjack isn't just participating in the recovery—it's helping to lead it.

Jim Jarrell: Skyjack isn't just participating in recovery, it's helping to lead it. Turning to agriculture, market conditions remain challenging, with industry demand expected to be down approximately 15% in North America, with Europe and the rest of the world flat to marginally down for the year. Despite that backdrop, all three of our brands continue to gain market share on key product lines. MacDon increased global windrower share. Salford continued to grow its tillage position, and Bourgault gained share in the U.S. air seeder market. In a down cycle, that's the ultimate proof point. It speaks to the strength of our products, our customer relationships, and the execution of our teammates.

Speaker #1: Turning to agriculture, market conditions remain challenging, with industry demand expected to be down approximately 15% in North America, and with Europe and the rest of the world flat to marginally down for the year.

Speaker #1: Despite that backdrop, all three of our brands continue to gain market share on key product lines. McDon increased global windrower share, Sulford continued to grow its tillage position, and Forgo gained share in the US air cedar market.

Speaker #1: In a down cycle, that's the ultimate proof point. It speaks to the strength of our products, our customer relationships, and the execution of our teammates.

Jim Jarrell: It speaks to the strength of our products, our customer relationships, and the execution of our teammates. In North America, commodity prices remain largely unchanged, though we have started to see modest trends in the right direction. Overall, U.S. farmer sentiment remains less optimistic due to higher input costs. However, sentiment should become more clear when the United States Department of Agriculture predicts its 2026 yields following the Summer Cross tour process. U.S. net farm income is expected to be CAD 159 billion, up over CAD 154 billion in 2025, largely on the CAD 14 billion increase in direct government payments. However, fertilizer and diesel fuel prices are squeezing farmer profitability. As stated in Europe and rest of the world, the market outlooks remain largely unchanged. In Europe, the market is seen as being resilient in the face of geopolitical and commodity pricing headwinds, ultimately resulting in a flat 2026.

Speaker #1: In North America, commodity prices remain largely unchanged, though we have started to see modest trends in the right direction. Overall, U.S. farmer sentiment remains less optimistic due to higher input costs.

Jim Jarrell: In North America, commodity prices remain largely unchanged, though we have started to see modest trends in the right direction. Overall, U.S. farmer sentiment remains less optimistic due to higher input costs. However, sentiment should become more clear when the United States Department of Agriculture predicts its 2026 yields following the Summer Cross tour process. U.S. net farm income is expected to be CAD 159 billion, up over CAD 154 billion in 2025, largely on the CAD 14 billion increase in direct government payments. However, fertilizer and diesel fuel prices are squeezing farmer profitability. As stated in Europe and rest of the world, the market outlooks remain largely unchanged. In Europe, the market is seen as being resilient in the face of geopolitical and commodity pricing headwinds, ultimately resulting in a flat 2026.

Speaker #1: However, sentiment should become more clear when the USDA predicts its '26 yields following the summer crop to reprocess. US net farm income is expected to be $159 billion, up over $154 billion in '25, largely on the $14 billion increase in direct government payments.

Speaker #1: However, fertilizer and diesel fuel prices are squeezing farmer profitability. As stated, in Europe and the rest of the world, the market outlooks remain largely unchanged.

Speaker #1: In Europe, the market is seen as being resilient in the face of geopolitical and commodity pricing headwinds, ultimately resulting in a flat 2026. In the rest of the world, it's mixed.

Jim Jarrell: In the rest of the world, it's mixed. An example, South America, Brazil corn and soy yields are favorable and have some of the largest crop yields on record. In Australia, crop yields expected to be down versus last year, however, still yielding crop results above the long-term average. As well, we continue to monitor global trade tensions, government bridge payments, and channel inventories to react to all the key market signals that we need to see. Just as exciting is what we're doing behind the scenes. Across our agriculture business, we're accelerating automation and leveraging expertise developed in our mobility operations to transform manufacturing productivity. During the year, MacDon installed advanced mobile vending robots and continued to add automation through its facility to improve efficiency, throughput quality, and cost competitiveness.

Speaker #1: An example, South America, Brazil corn and soy yields are favorable and have some of the largest crop yields on record. In Australia, crop yields expected to be down versus last year.

Speaker #1: However, steel-yielding crop results are above the long-term average. As well, we continue to monitor global trade tensions, government bridge payments, and channel inventories to react to all the key market signals that we need to see.

Speaker #1: Just as exciting as what we're doing behind the scenes, across our agriculture business, we're accelerating automation and leveraging expertise developed in our mobility operations to transform manufacturing productivity.

Speaker #1: During the year, McDon installed advanced mobile bending robots and continues to add automation through its facilities to improve efficiency, throughput quality, and cost competitiveness.

Speaker #1: By year-end, McDon will operate approximately 340 robots per 10,000 employees, well above Canada's average of 240, and more than double the global average of 132.

Jim Jarrell: By the year-end, MacDon will operate approximately 340 robots per 10,000 employees, well above Canada's average of 240 and more than double the global average of 132. At Linamar overall, we are proud to say we run at a rate of 1,200 per 10,000, which I believe is a benchmark. This is another example of the Linamar advantage: transferring technology, automation, and best practices across our businesses to strengthen competitive and drive long-term value. In agriculture, we're doing what great companies do during downturn, gaining share, improving productivity, and preparing for the recovery to win. Finally, looking at the automotive industry, we're seeing some tempered expectations quarter-over-quarter for 2026 and into 2027. In North America, 2026 expectations are that light vehicles will be down 1.3% as production is expected to soften as affordability challenges, elevated vehicle prices, and growing inventory levels weigh on demand.

Speaker #1: At LINAMAR, overall, we are proud to say we run at a rate of 1,200 per 10,000, which I believe is a benchmark. This is another example of the LINAMAR advantage.

Speaker #1: Transferring technology, automation, and best practices across our businesses to strengthen competitiveness and drive long-term value. In agriculture, we're doing what great companies do during downturns: gaining share, improving productivity, and preparing for the recovery to win.

Speaker #1: Finally, looking at the automotive industry, we're seeing some tempered expectations. Quarter over quarter for '26 and into '27. In North America, '26 expectations are that light vehicles will be down 1.3 as production is expected to soften as affordability challenges elevated vehicle prices and growing inventory levels weigh on demand.

Jim Jarrell: In North America, 2026 expectations are that light vehicles will be down 1.3% as production is expected to soften as affordability challenges, elevated vehicle prices, and growing inventory levels weigh on demand. Although sales have proven much more resilient than expected, the ongoing volatility in trade environments, coupled with higher energy costs, are continuing to create a cautious outlook in the near term. For 2027, light vehicles are expected to be flat to slightly down versus the prior expectation of being up 2.3% as production is forecast to normalize and OEMs are aligning production with demand. In Europe, expectations are that the light vehicle production will be down 0.9% versus the prior expectation of being down 1.8%. Production is forecasted to decline due to higher manufacturing and energy costs.

Speaker #1: Although sales have proven much more resilient than expected, the ongoing volatility and trade environments coupled with higher energy costs are continuing to create a cautious outlook in the near term.

Jim Jarrell: Although sales have proven much more resilient than expected, the ongoing volatility in trade environments, coupled with higher energy costs, are continuing to create a cautious outlook in the near term. For 2027, light vehicles are expected to be flat to slightly down versus the prior expectation of being up 2.3% as production is forecast to normalize and OEMs are aligning production with demand. In Europe, expectations are that the light vehicle production will be down 0.9% versus the prior expectation of being down 1.8%. Production is forecasted to decline due to higher manufacturing and energy costs. Continued competitive pressure from Chinese imports and weaker export opportunities are weighing on regional output. Growth in EV demand is providing some support, but profitability and capacity utilization remain under pressure.

Speaker #1: For '27, light vehicles are expected to be flat to slightly down versus prior expectation of being up 2.3% as production is forecast to normalize and OEMs are aligning production with demand.

Speaker #1: In Europe, expectations are that light vehicle production will be down 0.9% versus the prior expectation of being down 1.8%. Production is forecasted to decline due to higher manufacturing and energy costs. Continued competitive pressure from Chinese imports and weaker export opportunities are weighing on regional output.

Jim Jarrell: Continued competitive pressure from Chinese imports and weaker export opportunities are weighing on regional output. Growth in EV demand is providing some support, but profitability and capacity utilization remain under pressure. For 2027, light vehicle is expected to be largely flat versus prior expectations of being slightly up as more gradual recovery is expected, supported by improving vehicle demand, electrification adoption, although cost pressure and competition will remain. In Asia, light vehicle production is expected to decline 2.1% versus prior expectations of being down 1.2%, mainly driven by weaker domestic demand in China offsetting strong growth in India and parts of Asia. Export strength, government incentives, and continued electrification provide some support.

Speaker #1: Growth in EV demand is providing some support, but profitability and capacity utilization remain under pressure. For 2027, light vehicle is expected to be largely flat versus prior expectations of being slightly up, as a more gradual recovery is expected.

Jim Jarrell: For 2027, light vehicle is expected to be largely flat versus prior expectations of being slightly up as more gradual recovery is expected, supported by improving vehicle demand, electrification adoption, although cost pressure and competition will remain. In Asia, light vehicle production is expected to decline 2.1% versus prior expectations of being down 1.2%, mainly driven by weaker domestic demand in China offsetting strong growth in India and parts of Asia. Export strength, government incentives, and continued electrification provide some support. However, geopolitical risks and higher input costs are the main headwinds. For 2027, production is expected to be flat to slightly up 0.4% versus the prior expectation of up to 0.8%, supported by demand in India and continued electrification. Globally, this positions light vehicle production expectations for 2026 as being down 2.1% versus the previous 1.8%, and for 2027, slightly flat growth of 0.7% versus the previous 1.5% increase.

Speaker #1: Support by improving vehicle demand, electrification adoption, although cost pressure and competition will remain. In Asia, light vehicle production is expected to decline 2.1% versus prior expectations of being down 1.2, mainly driven by weaker domestic demand in China, offsetting strong growth in India and parts of Asia.

Speaker #1: Export strength, government incentives, and continued electrification provide some support. However, geopolitical risks and higher input costs are the main headwinds. For 2027, production is expected to be flat to slightly up, at 0.4% versus the prior expectation of up to 0.8%, supported by demand in India and continued electrification.

Jim Jarrell: However, geopolitical risks and higher input costs are the main headwinds. For 2027, production is expected to be flat to slightly up 0.4% versus the prior expectation of up to 0.8%, supported by demand in India and continued electrification. Globally, this positions light vehicle production expectations for 2026 as being down 2.1% versus the previous 1.8%, and for 2027, slightly flat growth of 0.7% versus the previous 1.5% increase.

Speaker #1: Globally, this positions light vehicle production expectations for 2026 as being down 2.1% versus the previous 1.8%. And for 2027, slightly flat growth of 0.7% versus the previous 1.5% increase.

Speaker #1: Turning to our CPV performance for the quarter, our key strategic acquisitions of Aludine North America, Leipzig, and, beginning in Q2, with the winning groups in Remscheid and Pensburg facilities are driving strong gains in existing and new customers.

Jim Jarrell: Turning to our CTD performance for the quarter, our key strategic acquisitions of Aludyne North America, Lightstick, and beginning in Q2 with the Winning BLW groups in Remscheid and Penzberg facilities are driving strong gains in existing and new customers. North America CTD was up 25% to CAD 363. Europe was up 10.2% to CAD 107 basically, and Asia Pacific saw growth with an increase of 12.6% year over year to CAD 126.5. Globally, our CTD grew an astounding 20% year over year to CAD 977.2. Looking at new business wins for the quarter across both mobility and industrial, Linamar saw a new business win value of close to CAD 800 million. Through our strategic acquisitions and takeover work, we saw significant program wins for components such as knuckles and a significant cylinder head program win.

Speaker #1: North America's CPV was up 25% to $363. Europe was up 10.2% to basically $107, and Asia Pacific saw growth with an increase of 12.6% year over year to $12.65.

Speaker #1: Globally, our CPV grew an astounding 20% year over year to $97.72. Looking at new business wins for the quarter across both Mobility and Industrial, Linamar saw a new business win value of close to $800 million.

Speaker #1: Through our strategic acquisitions and takeover work, we saw significant program wins for components such as knuckles, and a significant cylinder head program win are propulsion agnostic new business wins on knuckles, emphasizes our sustained momentum in LINAMAR's structural and chassis expansion, allowing LINAMAR to expand its propulsion agnostic portfolio across all powertrain types.

Jim Jarrell: Our propulsion-agnostic new business wins on knuckles emphasizes our sustained momentum in Linamar's structural and chassis expansion, allowing Linamar to expand its propulsion-agnostic portfolio across all powertrain types. As I mentioned last quarter, Linamar services eight different mega markets in our Linamar 2100 plan, which are being displayed there. These mega markets have a combined potential between CAD 15 trillion and CAD 20 trillion in the next decade. Looking at two of our new segments that I've spoken about in the past few quarters, there are a few exciting developments that I'd like to discuss. First, defense. We have continued to make excellent strides on displaying to the key primes in government that Linamar's capabilities are directly applicable to this space. Our scalability, automation, and expertise in core capabilities are being received extraordinarily well, as has recently translated into an MoU with a large international prime who we're very excited to continue working with.

Speaker #1: As I mentioned last quarter, LINAMAR services eight different mega markets in our 2100 plan, which are being displayed there. These mega markets have a combined potential between $15 and $20 trillion in the next decade.

Speaker #1: Looking at two of our new segments that I've spoken about in the past few quarters, there are a few exciting developments that I'd like to discuss.

Speaker #1: First, defense. We have continued to make excellent strides in demonstrating to the key primes and governments that Linamar's capabilities are directly applicable to this space.

Speaker #1: Our scalability, automation, and expertise in core capabilities are being received extraordinarily well as has recently translated into an MOU with a large international prime who we're very excited to continue working with.

Jim Jarrell: Our scalability, automation, and expertise in core capabilities are being received extraordinarily well, as has recently translated into an MoU with a large international prime who we're very excited to continue working with. Looking at robotics, the team continues to also make amazing strides. We have signed an LOI to be a manufacturer in North America for cobots and have recently signed a third LOI for manufacturing for humanoid robots. The takeaway is pretty clear and simple. Linamar is not defined by one industry. Automotive is proof of our capabilities, not the limit of them. We are a global advanced manufacturing and product development technology partner. Before I hand it over to Dale, I would like to spend just a moment looking ahead.

Speaker #1: Looking at robotics, the team continues to also make amazing strides. We've signed an LOI to be a manufacturer in North America for cobots, and have recently signed a third LOI for manufacturing for humanoid robots.

Jim Jarrell: Looking at robotics, the team continues to also make amazing strides. We have signed an LOI to be a manufacturer in North America for cobots and have recently signed a third LOI for manufacturing for humanoid robots. The takeaway is pretty clear and simple. Linamar is not defined by one industry. Automotive is proof of our capabilities, not the limit of them. We are a global advanced manufacturing and product development technology partner. Before I hand it over to Dale, I would like to spend just a moment looking ahead. While much of our conversation today is focused on navigating some tariffs, market uncertainty, and other challenges, what excites us here most is the opportunity in front of us. Linamar enters 2027 with significant momentum across our business. We are built for growth.

Speaker #1: The takeaway is pretty clear and simple. LINAMAR is not defined by one industry. Automotive is proof of our capabilities, not the limit of them.

Speaker #1: We are a global advanced manufacturing and product development technology partner. So before I hand it over to Dale, I'd like to spend just a moment looking ahead while much of our conversation today is focused on navigating some tariffs, market uncertainty, and other challenges what excites us here most is the opportunity in front of us.

Jim Jarrell: While much of our conversation today is focused on navigating some tariffs, market uncertainty, and other challenges, what excites us here most is the opportunity in front of us. Linamar enters 2027 with significant momentum across our business. We are built for growth. We have a strong launch pipeline, growing exposure to attractive end markets, increasing operational efficiency, and a track record of winning in challenging environments. These are not future opportunities we are hoping to capture. They are opportunities we are actively launching, investing in, and executing today. As a result, we expect continued top-line growth, another year of strong earnings improvement, and further margin expansion. Our focus remains unchanged: profitable growth, operational excellence, creating increasing value for our shareholders. We are also investing for the future.

Speaker #1: Linamar enters '27 with significant momentum across our business. We're built for growth. We have a strong launch pipeline, growing exposure to attractive end markets, increasing operational efficiency, and a track record of winning in challenging environments.

Jim Jarrell: We have a strong launch pipeline, growing exposure to attractive end markets, increasing operational efficiency, and a track record of winning in challenging environments. These are not future opportunities we are hoping to capture. They are opportunities we are actively launching, investing in, and executing today. As a result, we expect continued top-line growth, another year of strong earnings improvement, and further margin expansion. Our focus remains unchanged: profitable growth, operational excellence, creating increasing value for our shareholders. We are also investing for the future. Capital spending will support major program launches, capacity expansion, automation, and strategic growth initiatives. At the same time, we remain committed to maintaining a strong balance sheet, generating robust free cash flow, and preserving the flexibility to pursue both organic and inorganic opportunities as they arise.

Speaker #1: These are not future opportunities we're hoping to capture. They are opportunities we are actively launching, investing in, and executing today. As a result, we expect continued top-line growth, another year of strong earnings improvement, and further margin expansion.

Speaker #1: Our focus remains unchanged. Profitable growth, operational excellence, creating increasing value for our shareholders. We're also investing for the future. Capital spending will support major program launches.

Jim Jarrell: Capital spending will support major program launches, capacity expansion, automation, and strategic growth initiatives. At the same time, we remain committed to maintaining a strong balance sheet, generating robust free cash flow, and preserving the flexibility to pursue both organic and inorganic opportunities as they arise. When I look at Linamar today, I see a company that is stronger, more diversified, and better positioned than any time in our history. Our markets are evolving, technology is accelerating, and our customers continue to look for innovative and capable partners. We believe Linamar is uniquely positioned to capitalize on those trends. The future isn't something we are waiting for. It is something we are building, and certainly the best is yet to come. With that, I will turn it over to Dale to walk through a financial overview of the quarter.

Speaker #1: Capacity expansion, automation, and strategic growth initiatives. At the same time, we remain committed to maintaining a strong balance sheet, generating robust free cash flow, and preserving the flexibility to pursue both organic and inorganic opportunities as they arise.

Speaker #1: When I look at LINAMAR today, I see a company that is stronger, more diversified, and better positioned than any time in our history. Our markets are evolving.

Jim Jarrell: When I look at Linamar today, I see a company that is stronger, more diversified, and better positioned than any time in our history. Our markets are evolving, technology is accelerating, and our customers continue to look for innovative and capable partners. We believe Linamar is uniquely positioned to capitalize on those trends. The future isn't something we are waiting for. It is something we are building, and certainly the best is yet to come. With that, I will turn it over to Dale to walk through a financial overview of the quarter.

Speaker #1: Technology is accelerating, and our customers continue to look for innovative capable partners. We believe LINAMAR is uniquely positioned to capitalize on those trends. The future isn't something we're waiting for.

Speaker #1: It's something we're building, and certainly, the best is yet to come. With that, I'll turn it over to Dale to walk through a financial overview for the quarter.

Speaker #2: Thank you, Jim. Good afternoon, everyone. Linda covered at a high level the financial performance in the quarter, so I'll jump directly into the business segment review, starting with the mobility segment.

Dale Schneider: Thank you, Jim. Good afternoon, everyone. Linda covered at a high level the financial performance in the quarter, so I will jump directly into the business segment review, starting with the Mobility segment. Mobility sales increased by CAD 400.8 million, or 20.5% over Q2 last year to CAD 2.4 billion. This growth was mainly due to the increased sales from the recent acquisitions, which made a significant contribution in the quarter. Additionally, the higher launch and mature program volumes further boosted sales. Positive impacts from FX changes since last year also provided a benefit in the quarter. However, these gains were partially offset by lower volumes on certain ending programs and reduced volumes on some EV programs. Q2 normalized operating earnings for Mobility were up 28.6% over last year to CAD 194 million.

Speaker #2: Mobility sales increased by $400.8 million, or 20.5%, over Q2 last year to $2.4 billion. This growth was mainly due to increased sales from the recent acquisitions, which made a significant contribution in the quarter.

Speaker #2: Additionally, the higher launch and mature program volumes further boosted sales. Positive impacts from FX changes since last year also provided a benefit in the quarter.

Speaker #2: However, these gains were partially offset by lower volumes in certain ending programs and reduced volumes on some new programs. Q2 normalized operating earnings for Mobility were up 28.6% over last year to $194 million.

Speaker #2: The improvement was driven by increased earnings from our higher volumes on launching and mature programs, the recent acquisitions, and operational efficiencies, though partially offset by lower volumes on ending programs and reduced EV volumes.

Dale Schneider: The improvement was driven by increased earnings from our higher volumes on launching mature programs, the recent acquisitions, and operational efficiencies, though partially offset by lower volumes on ending programs and reduced EV volumes, and the FX head tax compared to Q2 2025. Turning to the Industrial, sales increased by 13.8%, or CAD 95.3 million to CAD 783.5 million in Q2. This increase was driven by the significantly higher access equipment sales as a result of strong market demand. This was partially offset by lower agricultural sales in a significantly down market, despite global market share gains on key products such as windrowers, air seeders, and tillage equipment. Normalized Industrial operating earnings in Q2 decreased by CAD 24.6 million or 23.8% over last year to CAD 78.7 million.

Speaker #2: And the FX impacts compared to Q2 in 2025. Turning to the Industrial segment, sales increased by 13.8%, or $95.3 million, to $783.5 million in Q2.

Speaker #2: This increase was driven by the significantly higher access equipment sales as a result of strong market demand. This was partially offset by lower agricultural sales and a significantly down market despite global market share gains on key products such as wind rotors, air seeders, and tillage equipment.

Speaker #2: Normalized industrial operating earnings in Q2 decreased by $24.6 million, or 23.8%, over last year to $78.7 million. The decline reflected the impact of the new 232 tariffs and the lower agricultural sales, partially offset by the increased earnings from the strong access equipment sales and operational efficiencies.

Dale Schneider: The decline reflected the impact of the new 232 tariffs and the lower agricultural sales, partially offset by the increased earnings from the strong access equipment sales and operational efficiencies. Starting with our overall cash position, which came in at CAD 1.3 billion on 30 June, an increase of CAD 266.1 million compared to 25 June. During the second quarter, we generated CAD 341.4 million in cash from operating activities, which was partially used to fund the Q2 debt repayments, CapEx, and share buybacks. In Q2, we generated CAD 236.5 million in free cash flow, and year to date, we have generated nearly CAD 500 million in free cash flow. Turning to leverage, net debt to EBITDA was 0.52 times at the quarter, an improvement from 1.02 times a year ago. The amount of available credit on our credit facilities was CAD 725.2 million, and our liquidity at the end of Q2 increased to CAD 2 billion.

Speaker #2: Starting with our overall cash position, which came in at $1.3 billion on June 30th, an increase of $266.1 million compared to June 25. During the second quarter, we generated $341.4 million in cash from operating activities, which was partially used to fund the Q2 debt repayments, capex, and share buybacks.

Speaker #2: In Q2, we generated $236.5 million in free cash flow, and year-to-date, we've generated nearly $500 million in free cash flow. Turning to leverage, net debt to EBITDA was 0.52 times at the quarter.

Speaker #2: An improvement from 1.02 times a year ago. The amount of available credit on our credit facilities was $725.2 million, and our liquidity at the end of Q2 increased to $2 billion.

Dale Schneider: The amount of available credit on our credit facilities was CAD 725.2 million, and our liquidity at the end of Q2 increased to CAD 2 billion. Our NCIB program that was launched in Q3 2025 earnings call and will expire on 16 November. This program authorized the purchase and cancellation of up to 3.9 million shares. To date, we have returned over CAD 92 million to shareholders through the repurchase of over 1 million shares. This brings our total cash returned to shareholders since 24 November to CAD 192 million, with the purchase and cancellation of approximately 2.8 million shares. In addition, the company increased its quarterly dividend by 10% from CAD 0.29 to CAD 0.32 per share. These initiatives reflect our disciplined capital allocation strategy, maintaining a strong balance sheet, investing in growth, and returning excess cash to shareholders.

Speaker #2: Our NCIB program that was launched in Q3 '25, earnings call, and will expire on November 16th. This program authorized the purchase and cancellation of up to 3.9 million shares.

Dale Schneider: Our NCIB program that was launched in Q3 2025 earnings call and will expire on 16 November. This program authorized the purchase and cancellation of up to 3.9 million shares. To date, we have returned over CAD 92 million to shareholders through the repurchase of over 1 million shares. This brings our total cash returned to shareholders since 24 November to CAD 192 million, with the purchase and cancellation of approximately 2.8 million shares. In addition, the company increased its quarterly dividend by 10% from CAD 0.29 to CAD 0.32 per share. These initiatives reflect our disciplined capital allocation strategy, maintaining a strong balance sheet, investing in growth, and returning excess cash to shareholders. Turning to outlook, I will outline Linamar's expectations for Q3, focusing on our Mobility and Industrial segments, in addition to highlighting the changes to our outlook for 2026 from what was announced on our last earnings call.

Speaker #2: To date, we have returned over $92 million to shareholders through the repurchase of over a million shares. This brings our total cash return to shareholders since November '24 to $192 million, with the purchase and cancellation of approximately 2.8 million shares.

Speaker #2: In addition, the company increased its quarterly dividend by 10%, from $0.29 to $0.32 per share. These initiatives reflect our disciplined capital allocation strategy, maintaining a strong balance sheet, investing in growth, and returning excess cash to shareholders.

Speaker #2: Turning to outlook, I will outline LINAMAR's expectations for Q3, focusing on our Mobility and Industrial segments, in addition to highlighting the changes to our outlook for 2026 from what was announced on our last earnings call.

Dale Schneider: Turning to outlook, I will outline Linamar's expectations for Q3, focusing on our Mobility and Industrial segments, in addition to highlighting the changes to our outlook for 2026 from what was announced on our last earnings call. Please note we are not providing segment-level guidance for full year 2026 currently due to the elevated volatility in the global markets and the ongoing geopolitical uncertainty, which makes these segment forecasts less reliable. Regarding the Mobility segment, our outlook for the third quarter is highly positive. We anticipate double-digit growth in both sales and normalized earnings driven by ongoing program launches, recent acquisitions, and continued operational improvements. Third quarter margins are projected to continue to be within our normal range and to be relatively flat to Q3 2025. In the Industrial segment, agricultural markets remain weak entering Q3.

Speaker #2: Please note we are not providing segment-level guidance for full year 2026 currently, due to the elevated volatility in the global markets and the ongoing geopolitical uncertainty, which may make segment forecasts less reliable.

Dale Schneider: Please note we are not providing segment-level guidance for full year 2026 currently due to the elevated volatility in the global markets and the ongoing geopolitical uncertainty, which makes these segment forecasts less reliable. Regarding the Mobility segment, our outlook for the third quarter is highly positive. We anticipate double-digit growth in both sales and normalized earnings driven by ongoing program launches, recent acquisitions, and continued operational improvements. Third quarter margins are projected to continue to be within our normal range and to be relatively flat to Q3 2025. In the Industrial segment, agricultural markets remain weak entering Q3. We anticipate Industrial sales growth but expect normalized operating earnings to decline by double digits, with margins expected to contract from Q3 2025 levels and be below our typical 14% to 18% range.

Speaker #2: Regarding the mobility segment, our outlook for the third quarter is highly positive. We've anticipated double-digit growth in both sales and normalized earnings, driven by ongoing program launches, recent acquisitions, and continued operational improvements.

Speaker #2: Third quarter margins are projected to continue to be within our normal range, and to be relatively flat to Q3 '25. In the industrial segment, agricultural markets remain weak, entering Q3.

Speaker #2: We anticipate industrial sales growth, but expect normalized operating earnings to decline by double digits, with margins expected to contract from Q3 2025 levels and be below our typical 14 to 18 percent range.

Dale Schneider: We anticipate Industrial sales growth but expect normalized operating earnings to decline by double digits, with margins expected to contract from Q3 2025 levels and be below our typical 14% to 18% range. The sales gains from the access markets will partially offset the agricultural softness, though margins will continue to be pressured by the new amended 232 tariffs that began in April of 2026. As a result, on a consolidated basis, we expect double-digit sales growth in normalized earnings, and a modest contraction in normalized net margin, as well as positive free cash flow. For the full year 2026, our latest outlook is unchanged from what we provided in the Q1 call. We are expecting strong sales growth in the double digits, and we continue to expect growth in normalized EPS.

Speaker #2: The sales gains from the access markets will partially offset the agricultural softness, though margins will continue to be pressured by the new amended 232 tariffs that began in April of '26.

Dale Schneider: The sales gains from the access markets will partially offset the agricultural softness, though margins will continue to be pressured by the new amended 232 tariffs that began in April of 2026. As a result, on a consolidated basis, we expect double-digit sales growth in normalized earnings, and a modest contraction in normalized net margin, as well as positive free cash flow. For the full year 2026, our latest outlook is unchanged from what we provided in the Q1 call. We are expecting strong sales growth in the double digits, and we continue to expect growth in normalized EPS. We anticipate a modest reduction in normalized net margins, primarily due to the effects of the newly amended 232 tariffs as we continue to explore and pursue the mitigation strategies.

Speaker #2: As a result, on a consolidated basis, we expect double-digit sales growth, growth in normalized earnings, and a modest contraction in normalized net margin, as well as positive free cash flow.

Speaker #2: For the full year 2026, our latest outlook is unchanged from what we've provided in the Q1 call. We are expecting strong sales growth in the double digits, and we continue to expect growth in normalized EPSs.

Speaker #2: We anticipate a modest reduction in normalized net margins, primarily due to the effects of the newly amended 232 tariffs, as we continue to explore and pursue mitigation strategies.

Dale Schneider: We anticipate a modest reduction in normalized net margins, primarily due to the effects of the newly amended 232 tariffs as we continue to explore and pursue the mitigation strategies. We continue to expect CapEx to increase from the prior year while remaining below our normal range as a percent of sales. We continue to expect a very strong balance sheet with low leverage alongside strongly positive free cash flow. This outlook reflects the strong mobility growth given the launches, the full-year contribution from Aludyne North American operations and the Leipzig casting facility, and three-quarters of the Winning BLW facilities, all supporting top-line and bottom-line performance in mobility. The ag market rate of decline is moderating, though the conditions remain soft, with stabilization expected later this year or into early next year.

Speaker #2: We continue to expect capex to increase from the prior year, while remaining below our normal range as a percent of sales. We continue to expect a very strong balance sheet, with low leverage alongside strongly positive free cash flow.

Dale Schneider: We continue to expect CapEx to increase from the prior year while remaining below our normal range as a percent of sales. We continue to expect a very strong balance sheet with low leverage alongside strongly positive free cash flow. This outlook reflects the strong mobility growth given the launches, the full-year contribution from Aludyne North American operations and the Leipzig casting facility, and three-quarters of the Winning BLW facilities, all supporting top-line and bottom-line performance in mobility. The ag market rate of decline is moderating, though the conditions remain soft, with stabilization expected later this year or into early next year. The access markets are showing strong growth for 2026 in the double digits. Overall, the external environment remains mixed and visibility is still limited, but Linamar's fundamentals remain very strong.

Speaker #2: This outlook reflects the strong mobility growth given the launches, the full-year contribution from Aludyne North American operations, and the Leipzig casting facility in three quarters of the winning facilities.

Speaker #2: All supporting top-line and bottom-line performance in Mobility. The Ag market rate of decline is moderating, though conditions remain soft, with stabilization expected later this year or into early next year.

Speaker #2: The access markets are showing strong growth for '26 in the double digits. Overall, the external environment remains mixed and visibility is still limited, but LINAMAR's fundamentals remain very strong. We have a very strong balance sheet, significant liquidity, and we continue to expect strongly positive free cash flow, which gives us flexibility to invest and execute.

Dale Schneider: The access markets are showing strong growth for 2026 in the double digits. Overall, the external environment remains mixed and visibility is still limited, but Linamar's fundamentals remain very strong. We have a very strong balance sheet, significant liquidity, and we continue to expect strongly positive free cash flow, which gives us flexibility to invest and execute. At the same time, mobility is supported by launches, growth from acquisitions, which positions us well for continued growth as we continue to work through the mitigation strategies to reduce the impact of the tariffs on profitability. Jim has already covered the initial thoughts on 2026, so I will not repeat that discussion. This slide is included here for your reference. In closing, Linamar delivered a very strong quarter by delivering record sales, excellent normalized EPS, and a very strong balance sheet and outstanding liquidity.

Dale Schneider: We have a very strong balance sheet, significant liquidity, and we continue to expect strongly positive free cash flow, which gives us flexibility to invest and execute. At the same time, mobility is supported by launches, growth from acquisitions, which positions us well for continued growth as we continue to work through the mitigation strategies to reduce the impact of the tariffs on profitability. Jim has already covered the initial thoughts on 2026, so I will not repeat that discussion. This slide is included here for your reference. In closing, Linamar delivered a very strong quarter by delivering record sales, excellent normalized EPS, and a very strong balance sheet and outstanding liquidity. We are well-positioned to invest in growth, navigate volatility, and continue returning capital to shareholders. Thank you, and I will now like it open up the call for questions.

Speaker #2: At the same time, Mobility is supported by launches and growth from acquisitions, which positioned us well for continued growth as we continue to work through the mitigation strategies to reduce the impact of the tariffs on profitability.

Speaker #2: Jim has already covered the initial thoughts on 2026, so I will not repeat that discussion. This slide is included here for your reference. In closing, Linamar delivered a very strong quarter by delivering record sales, excellent normalized EPS, and a very strong balance sheet and outstanding liquidity.

Speaker #2: We are well positioned to invest in growth, navigate volatility, and continue returning capital to shareholders. Thank you, and I would now like to open up the call for questions.

Dale Schneider: We are well-positioned to invest in growth, navigate volatility, and continue returning capital to shareholders. Thank you, and I will now like it open up the call for questions.

Speaker #1: All right. Thank you, ladies and gentlemen. We will now begin the question and answer session. To ask a question, you may press a star, followed by the number one on your telephone keypad.

Operator 1: All right. Thank you, ladies and gentlemen. We will now begin the question and answer session. To ask a question, you may press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 2. One moment, please, for your first question. Your first question comes from the line of Ty Collin with CIBC Capital Markets. Please go ahead.

Operator: All right. Thank you, ladies and gentlemen. We will now begin the question and answer session. To ask a question, you may press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 2. One moment, please, for your first question. Your first question comes from the line of Ty Collin with CIBC Capital Markets. Please go ahead.

Speaker #1: And if you would like to withdraw your question, simply press star two. One moment, please, for your first question. And your first question comes from the line of Ty Collin with CIBC Capital Markets.

Speaker #1: Please go ahead.

Speaker #3: Hey, good evening, everyone. Thanks for taking my questions. Maybe just to start off, it seems like there's obviously been an inflection in the demand outlook for Skyjack, which is obviously positive to see.

Ty Collin: Hey, good evening, everyone. Thanks for taking my questions. Maybe just to start off, it seems like there's obviously been an inflection in the demand outlook for Skyjack, which is obviously positive to see. How do you feel that you're positioned from an inventory and a production standpoint to capture your share of that opportunity? Why is the Q3 outlook seemingly calling for a lower growth rate than you were able to generate in Q2, considering the outlook for Skyjack and ag have both improved?

Speaker #3: I mean, how do you feel that your position from an inventory and a production standpoint to capture your share of that opportunity? And then why is the Q3 outlook seemingly calling for a lower growth rate than you were able to generate in Q2, considering the outlook for Skyjack and ag have both improved?

Speaker #4: Yeah. I'll let Jim take the first question, but I'll just quickly answer the second. I mean, Q2 is always our strongest quarter for industrial, so that's just normal seasonality of the business.

Linda Hasenfratz: Yeah. I'll let Jim take the first question, but I'll just quickly answer the second. Q2 is always our strongest quarter for industrial, so that's just normal seasonality of the business. I wouldn't read too much into that. Over to Jim on the inventory question.

Speaker #4: So, I wouldn't read too much into that. And over to Jim on the inventory question.

Jim Jarrell: Yeah. Just on overall Skyjack, we certainly have the production capability to take on any sort of uplift right now. As we talked about, all the signals are very clear in the market right now. We know a lot of the major rental companies are increasing their CapEx throughout the back end of this year and into next year. We've all talked about AI and data centers, which our products fit very well into. Our backlog is healthy. I can say it's probably almost double to what it was last year this time. Our order intake probably in the same boat of double where we were last year. Really all the indicators are pretty good. Utilization rates as well from the rental companies are up, so really good signals, and we have the capability and the capacity.

Speaker #5: Yeah, I mean, just on overall Skyjack, we certainly have the production capability to take on any sort of uplift right now. And as we sort of talked about, all the signals are very clear in the market right now.

Speaker #5: We know a lot of the major rental companies are increasing their capex throughout the back end of this year and into next year. We've all talked about AI and data centers, which our products fit very well into.

Speaker #5: Our backlog is healthy. I can say it's probably almost double what it was at this time last year. Our order intake is probably in the same boat—about double where we were last year.

Speaker #5: So really, all the indicators are pretty good. Utilization rates as well from the rental companies are up. So really good signals. And we have the capability and the capacity.

Dale Schneider: The only concern that I would say, and we're on it, clearly, is supply chain. You've got a lot of supply chain issues that companies are dealing with, but we've got a good handle on it, and we've got inventory to satisfy customers.

Jim Jarrell: The only concern that I would say, and we're on it, clearly, is supply chain. You've got a lot of supply chain issues that companies are dealing with, but we've got a good handle on it, and we've got inventory to satisfy customers.

Speaker #5: The only concern that I would say—and we're on it, clearly—is supply chain, right? You've got a lot of supply chain issues that companies are dealing with, but we've got a good handle on it, and we've got inventory to satisfy customers.

Speaker #3: Okay, that's great to hear. And then turning back to the discussion around tariffs, I think since that original Section 232 rule change came into effect, a number of agricultural products were removed from the scope of that change.

Ty Collin: Okay, that is great to hear. Turning back to the discussion around tariffs. I think since that original Section 232 rule change came into effect, I think a number of agricultural products were removed from the scope of that chain. Are those incremental tariffs only impacting Skyjack at this point? Can you talk about how you and your customers are managing those costs given how substantial they are?

Speaker #3: So are those incremental tariffs only impacting Skyjack at this point? And can you talk about, I guess, how you, when your customers are managing those costs, given how substantial they are?

Speaker #5: Yeah. From my side, in regards to how we're dealing with our customers, I mean, obviously, no customer wants to see a price increase.

Jim Jarrell: Well, from my side in regards to how we are dealing it with our customers, obviously no customer wants to see a price increase, but what I had mentioned earlier, we are really focused on reducing and mitigating the tariffs. Again, what we look at is optimizing HS code classifications, distribution models. There is also duty recovery, like IEPA was basically reversed, so there is some IEPA recovery that is going on. Leverage the parts. For example, a no regret thing would be have a scissor lift go across or a boom go across the border into the US and put a part on that you would buy in the US anyway. So you reduce the value of that derivative product to mitigate some of those tariff impacts going across the border.

Speaker #5: But what I had mentioned earlier, we're really focused on reducing and mitigating the tariffs. Again, what we look at is optimizing HS code classifications, distribution models, and there's also duty recovery.

Speaker #5: IEPA was basically reversed, so there is some IEPA recovery that's going on. Leverage the parts. So, for example, a no-regret thing would be to have a scissor lift go across or a boom go across the border into the US and put a part on that you would buy in the US anyway.

Speaker #5: So you reduce the value of that sort of derivative product to mitigate some of those tariff impacts going across the border.

Speaker #4: And with respect to your question about which product it is and which business, I'll just remind you that we're not disclosing which specific businesses and products.

Linda Hasenfratz: With respect to your question about which product is it and which business, I will just remind you that we are not disclosing which specific businesses and products. It is certainly localized to our industrial segment. So that in itself is quite good news, because obviously the mobility segment is much larger and we are not seeing any tariff impact in the mobility automotive side of the business, which is a plus. As Jim says, we are focused on mitigation. I will remind you too that we do think that Q2 will be the worst quarter from a dollar value of tariffs, simply because it is a seasonal high for all of our industrial businesses. So, the impact was a little higher in Q2 than it will be later in the year.

Speaker #4: It is certainly localized to our Industrial segment, so that in itself is quite good news, because obviously the Mobility segment is much larger, and we are not seeing any tariff impact in the Mobility Automotive side of the business, which is a plus.

Speaker #4: And as Jim says, we're focused on mitigation. And I will remind you, too, that we do think that Q2 will be the worst quarter from a dollar value of tariffs, simply because it is the seasonal high for most of our, for all of our industrial businesses.

Speaker #4: So the impact was a little higher in Q2 than it will be later in the year.

Speaker #3: Okay, that's helpful. And if I could just sneak in one more and maybe follow up on that last comment you just made, Linda. So, if I sort of plug in what's implied by the Q3 guide for the Industrial segment, it seems to imply an even lower operating margin rate compared to Q2.

Ty Collin: Okay, that is helpful. If I could just sneak in one more and maybe follow up on that last comment you just made, Linda. If I sort of plug in what is implied by the Q3 guide for the industrial segment, it seems to imply an even lower operating margin rate compared to Q2. So, I am just wondering if that is sort of the right way to think about things for the rest of the year.

Speaker #3: So, I'm just wondering if that's sort of the right way to think about things for the rest of the year.

Speaker #4: Do you mean for the Industrial segment, or?

Linda Hasenfratz: Do you mean for the industrial segment or?

Ty Collin: That is for the industrial segment.

Speaker #3: That's for the industrial segment.

Speaker #4: Or overall? I mean, sorry?

Linda Hasenfratz: Overall? I mean, sorry?

Speaker #3: Sorry, that's for the Industrial segment.

Ty Collin: Sorry, that is for the industrial segment.

Speaker #4: Yeah. Well, I mean, Q3 is always going to be lower margin-wise than Q2 in the Industrial segment—and for that matter, in the Mobility segment—because Q3 has shutdowns, etc.

Linda Hasenfratz: Well, Q3 is always going to be lower margin-wise than Q2 in the industrial segment, for that matter in the mobility segment because Q3 has shutdown, et cetera. Seasonally for industrial, it is always lower. You should always expect margins to come down in Q3.

Speaker #4: And seasonally for Industrial, it's always lower. So you should always expect margins to come down in Q3.

Speaker #3: Okay. Great. Thanks. Appreciate it.

Ty Collin: Okay, great. Thanks. Appreciate it.

Speaker #2: Your next question comes from Brian Morrison of TD Cowan. Your line is already open.

Rachel Smith: Your next question comes from Brian Morrison of TD Cowen. Your line is already open.

Operator: Your next question comes from Brian Morrison of TD Cowen. Your line is already open.

Speaker #1: Okay, thank you. Good evening. First question: should we anticipate more tuck-in acquisitions in the near term within Mobility? You did indicate numerous opportunities on the call, Linda, and the strategy is clearly working.

Brian Morrison: Okay, thank you. Good evening. First question, should we anticipate more tuck-in acquisitions near term within mobility? You did indicate numerous opportunities on the call, and the strategy is clearly working. I am curious if they are margin-enhancing out of the gate and how you are able to integrate them so seamlessly.

Speaker #1: And then I'm curious if they're margin-enhancing out of the gate, and how you're able to integrate them so seamlessly.

Speaker #5: Yeah. I mean, from my side, Brian, again, there are a lot of opportunities out there for distressed. I mean, I think we get to look at all of them.

Jim Jarrell: Yeah. From my side, Brian, again, there is a lot of opportunities out there for distressed. I think we get to look at all of them, and I think the first thing that it fits a strategy for growth and technology. Again, in my mind, though some of it has slowed a little bit through the last couple of months. I would say Europe has a lot more than North America today. But in Europe it takes a little longer to get people's head around making those deals. Yes, for sure we are looking at those and how we tuck those in is work with customers and LINAMARize it as quick as we can. You need to have a good solid plan up front of how you will consolidate if you have to take plants out or change things. We really do an active job of that for day one.

Speaker #5: And I think the first thing is, does it fit the strategy for growth and technology? So again, I was, in my mind, though, some of it has slowed a little bit through the last couple of months.

Speaker #5: I would say Europe has a lot more than North America today. But in Europe, it takes a little longer to get people's heads around making those deals.

Speaker #5: So yes, for sure, we're looking at those. And how we tuck those in is work with customers and Linda Marais, as quickly as we can.

Speaker #5: And you need to have a good, solid plan up front for how you'll consolidate if you have to take plants out or change things. We really do an active job of that from day one.

Speaker #4: And I think that integration—I mean, we've done our fair share of acquisitions there for integrations over the last 10 years, and I think we've learned a lot along the road.

Linda Hasenfratz: I think that integration, we have done our fair share of acquisitions, therefore integrations over the last 10 years, and I think we have learned a lot along the road and we have developed a pretty good roadmap and process that we follow and we are always learning and adding to the playbook as well. With every integration you get a little bit better.

Speaker #4: And we've developed a pretty good roadmap and process that we follow, and we're always learning and adding to the playbook as well.

Speaker #4: So, with every integration, you get a little bit better.

Speaker #5: Yeah.

Jim Jarrell: Yeah.

Speaker #1: Okay. Maybe, Jim, if I turn to Industrial—we all knew access was going to be strong, but I think it was better than what we thought.

Brian Morrison: Okay. Maybe Jim, if I turn to industrial, we all knew access was going to be strong, but I think it was better than what we thought, and I understand the data centers and infrastructure, but is this largely scissor or are we seeing strength in booms and telehandlers as well?

Speaker #1: And I understand the data centers and infrastructure, but is this largely scissor, or are we seeing strengthened booms and telehandlers as well?

Speaker #5: We're getting strength across the board, but I would say—and maybe, Mark, you want to comment on this—AI data centers is such a good place for our scissors today, right?

Jim Jarrell: We are getting strength across the board. But, I would say, and maybe Mark, you want to comment on this, like AI data centers is such a good place for our scissors today, right? Our two new technology product lines really fit that, Brian. So, yeah, I think we are seeing a lot of scissor uplift, but we are getting booms and telehandlers as well.

Speaker #5: And our few new technology product lines really fit that, Brian. So, yeah, I think we're seeing a lot of scissor uplift, but we're getting booms and telehandlers as well.

Speaker #5: Yeah. Brian, we've got some new products that have come out on the booms, and we've got some electrified versions and a hybrid version. So maybe just some new technology that has been driving on the boom side of things.

Mark Stoddart: Yeah. Brian, we have got some new product that have come out on the booms, and we have got some electrified version and a hybrid version. So maybe it is just some new technology that has been driving on the boom side of things. But, yeah, definitely, the new models that we have come out on scissors have really gained a lot of traction.

[Company Representative] (Linamar): Yeah. Brian, we have got some new product that have come out on the booms, and we have got some electrified version and a hybrid version. So maybe it is just some new technology that has been driving on the boom side of things. But, yeah, definitely, the new models that we have come out on scissors have really gained a lot of traction.

Speaker #5: But yeah, definitely the new models that we've come out with on scissors have really gained a lot of traction. And if you remember, last quarter we were basically saying that if we were more or less flat for the year, and we're seeing up for the market. And as I said, our backlog is probably about double last year.

Jim Jarrell: Yeah, if you remember last quarter we were basically saying that it would be more or less flat for the year and we are seeing up for the market. As I said, our backlog is probably about double last year. Our order intake about double. Utilization rates are up. Another indicator we look at is canceled orders, which sounds a little weird, but, yeah, those are way down canceled orders. So the uptick is really there and rental companies' signals are that they are going to buy more capital.

Speaker #5: Our order intake about doubled. Utilization rates—they're up. Another indicator we look at is canceled orders, which sounds a little weird, but yeah, I mean, those are way down—canceled orders.

Speaker #5: So the uptick is really there, and rental companies' signals are that they're going to buy more capital.

Speaker #1: Okay, my last question. I was going to ask specifically about the impact of the tariffs, but Linda doesn't want me to go there. So, is it fair to say that one of the industrial segments is more impacted than the others?

Brian Morrison: Okay. My last question, I was going to ask specifically on the impact of the tariffs, but Linda does not want me to go there. Is it fair to say that one of the industrial segments is more impacted than the others? Then I apologize in advance because you went through this, but I am not totally straight on the 232s. Is this largely direct tariff exposure on metal derivatives, or is there also an impact due to margin decrements as volumes are down, as you are not the importer of record?

Speaker #1: And then I apologize in advance because you went through this, but I'm not totally straight on the 232s. Is this largely direct tariff exposure on metal derivatives, or is there also an impact due to margin decrements as volumes are down since you're not the importer of record?

Speaker #4: Yeah, I mean, the biggest tariff impact is from the 232 metal derivative product tariffs, right, that come in. There's a whole list of products that are covered, that when you're shipping into the US, are going to be subject to tariffs.

Linda Hasenfratz: Yeah. The biggest tariff impact is from the 232 metal derivative product tariffs, that come when there is-

Linda Hasenfratz: Yeah. The biggest tariff impact is from the 232 metal derivative product tariffs, that come when there is a whole list of products that are covered that when you are shipping into the US are going to be subject to tariffs. When they changed the methodology for calculating the tariffs at the beginning of April, that did create a bigger impact for some of our industrial products. I think the thing to focus on is a couple things. One, as I have mentioned a couple times, Q2 should be the peak CAD dollar-wise on the tariff side. Secondly, I think quite important to just remind you that the industrial segment is less than 25% of our overall sales. So the bottom-line impact to our blended business on the tariff side is much less impactful.

Linda Hasenfratz: a whole list of products that are covered that when you are shipping into the US are going to be subject to tariffs. When they changed the methodology for calculating the tariffs at the beginning of April, that did create a bigger impact for some of our industrial products. I think the thing to focus on is a couple things. One, as I have mentioned a couple times, Q2 should be the peak CAD dollar-wise on the tariff side. Secondly, I think quite important to just remind you that the industrial segment is less than 25% of our overall sales. So the bottom-line impact to our blended business on the tariff side is much less impactful. If I look at the full year, the impact of tariffs on our overall operating earnings is in single digits, and that is before any kind of mitigation.

Speaker #4: And when they changed the methodology for calculating the tariffs at the beginning of April, that did create a bigger impact for some of our industrial products.

Speaker #4: So, I think the thing to focus on is a couple of things. One, as I've mentioned a couple of times, '22 should be the peak, dollar-wise, on the tariff side.

Speaker #4: Secondly, I think it's quite important to just remind you that the industrial segment is less than 25% of our overall sales. So the bottom-line impact to our blended business on the tariff side is much less impactful, right?

Linda Hasenfratz: If I look at the full year, the impact of tariffs on our overall operating earnings is in single digits, and that is before any kind of mitigation.

Speaker #4: I mean, if I look at the full year, the impact of tariffs on our overall operating earnings is in single digits. And that's before any kind of mitigation.

Speaker #1: And sorry, could you just follow up and answer the question? Is it fair to say one of the industrial segments is far more impacted than the other?

Brian Morrison: And sorry, could you just follow up and answer the question? Is it fair to say one of the industrial segments is far more impacted than the other?

Linda Hasenfratz: We are not commenting on specific businesses within the industrial segment.

Speaker #4: We're not commenting on the specific businesses within the Industrial segment, so.

Jim Jarrell: It gets right down to the product level. It hits product levels depending on the derivative and the HS code. So, it is something you would not really want to have out there. Okay. Thank you very much.

Speaker #5: It gets right down to the product level, right? It's product levels, depending on the derivative and the HS code. So it's something you wouldn't really want to have out there.

Speaker #1: Okay. Thank you very much.

Rachel Smith: Your next question comes from Michael Glen of Raymond James. Your line is already open.

Operator: Your next question comes from Michael Glen of Raymond James. Your line is already open.

Speaker #3: Your next question comes from Michael Glenn of Raymond James. Your line is already open.

Speaker #1: Hi there. Can we just work through the mobility margin expectation for Q3 again? I just want to make sure I'm clear. Is the Q3 mobility margin— I think Dale might have indicated it's closer to flat year over year last year.

Michael Glen: Hi there. Can we just work through the mobility margin expectation for Q3 again? I just want to make sure I am clear. Is the Q3 mobility margin, I think Dale might have indicated it is closer to flat year-over-year. Last year it was 8.6%, but then I think you are also talking about there might be some seasonal weakness in Q3. I am just trying to make sure I get the right number in my model.

Speaker #1: It was 8.6%. But then I think you're also talking about there might be some seasonal weakness in Q3. I'm just trying to make sure I get the right number in my model.

Linda Hasenfratz: Well, we are guiding to flat to last year, which was, by the way, a little bit of an unusually high margin for a variety of reasons of things that were happening in Q3 of last year. So, we do think that mobility margins are going to stay within our normal margin range in Q3. They will be at a seasonally consistent level to what was achieved in the H1 of the year, and again, the reason you do not see expansion from last year is more to do with last year than it is this year. So we are still feeling good about where we are at with margins in the mobility side.

Speaker #4: Yeah. Yeah. We're guiding to flat to last year, which was sort of, by the way, a little bit of an unusually high margin. For a variety of reasons of things that were happening in Q3 of last year.

Speaker #4: So we do think that Mobility margins are going to stay within our normal margin range in Q3. They'll be seasonally consistent with the levels achieved in the first half of the year.

Speaker #4: And again, yeah, the reason you don't see expansion from last year is more to do with last year than it is this year. So we're still feeling good about where we're at with margins on the Mobility side.

Speaker #1: Okay. And just, you're talking about the record business wins that you're seeing, and can you just speak to how that might impact your CapEx in 2027 relative to 2026?

Michael Glen: Okay. And just, you are talking about the record business wins that you are seeing, and can you just speak to how that might impact your CapEx in 2027 relative to 2026? Should we think that we could be in for a bit of a bump in CapEx in 2027?

Speaker #1: Should we think that we could be in for a bit of a bump in capex in '27?

Jim Jarrell: We are factoring that into the outlook that I talked about and Dale put up on the screen. We are capturing it today there. If you hit one more slide there. You see CapEx increase from prior year, below normal range. It will be an increase, we think, based off the momentum we have on the new business wins. Keep in mind, though, whatever is available inside Linamar, we reallocate and move around. We try and mitigate that all the time in using flexible equipment. That is another good piece of information to know.

Speaker #5: We're factoring that into the outlook that I sort of talked about and Dale put up on the screen, so we're sort of capturing it there today.

Speaker #5: If you hit one more slide there. Yeah. So you see CapEx increased from the prior year, below normal range, but it'll be an increase. We think that's based off the momentum we have on the new business wins.

Speaker #5: And keep in mind, though, whatever is available inside Linamar, we reallocate and move around. So we try and mitigate that all the time by using flexible equipment.

Speaker #5: So that's another good piece of information to know.

Speaker #1: Okay. And then just on the Ag business, I think we all had our sights on 2027 as a potential better year in Ag. Do you think that outlook is getting pushed out now?

Michael Glen: Okay. Then, just on the ag business, I think we all had our sights on 2027 as a potential better year in ag. Do you think that that outlook is getting pushed out now?

Jim Jarrell: Yeah. The way the sentiment is, there is this trough in the market sort of lingers longer than expected. Some of the key things that I think we have touched upon, like commodity prices overall remain pretty stagnant. There are higher input costs, meaning fuel, fertilizer. Stocking levels on whole goods is very in a cautionary view, and inventory levels still remain high. Then when you look at the farmer sentiment, they are not that optimistic. They do have money, but they have delayed investments because they do not know what to predict. It is a very uncertain situation. That is what we are seeing is this thing is just sort of lingering, bouncing across the bottom. Then it depends on the products. Some of our order books are up in some of our products, and some are down, and it is just all being played off of the inventories.

Speaker #5: Yeah. I mean, the trough, I mean, the way the sentiment is, sort of this trough in the market sort of lingers longer than expected, right?

Speaker #5: And some of the key things that I think we touched upon, like commodity prices overall, sort of remain pretty stagnant. There's higher input cost, meaning fuel and fertilizer.

Speaker #5: Stocking levels on the whole goods is viewed with caution, and inventory levels still remain high. But when you look at the farmer sentiment, they're not that optimistic.

Speaker #5: They do have money, but they've delayed investments because they don't know what to predict. It's a very uncertain situation, right? And so that's sort of what we're seeing—is this thing is just sort of lingering, bouncing across the bottom.

Speaker #5: And then it depends on the products. Some of our order books are up in some of our products, and some are down. And it's just all being played off of the inventories.

Speaker #5: But really, I think the farmers are just sort of waiting to move, based on probably getting government subsidies or whatever in the marketplace. So that's sort of how some of our customers—we see it in some of the CNH, John Deere—are sort of reading the market right now.

Jim Jarrell: But really, I think the farmers are just waiting to move based on probably getting government subsidies or whatever in the marketplace. That is how some of our customers we see and some of the, like CNH Industrial, Deere & Company, are reading the market right now.

Speaker #4: Yeah, I mean, but I would add that, for sure, the decline is moderating this year. I mean, we're not seeing nearly the declines this year that we saw last year.

Linda Hasenfratz: Yeah. I would add that, for sure, the decline is moderating this year. We are not seeing nearly the declines this year that we saw last year. In fact, some areas of our ag business are actually up this year over last year, which is a really positive sign for things starting to pick up. I think Jim's comment is very valid that we are bouncing along the bottom here. Of course, I am a very optimistic person, but I personally think that we should see 2027 as a better year.

Speaker #4: And in fact, some areas of our ag business are actually up this year over last year, which is a really positive sign for things starting to pick up.

Speaker #4: So, I think Jim's comment is very valid—that we're bouncing along the bottom here. Of course, I'm a very optimistic person, but I personally think that we should see 2027 as a better year.

Speaker #1: Okay, and then I just want to ask: do you have any content with Chinese OEMs in Europe? Is there any opportunity there?

Michael Glen: Okay. I just want to ask, do you have any content with Chinese OEMs in Europe? Is there any opportunity there?

Speaker #5: Yeah, yeah. Michael, we currently aren't manufacturing components in Europe for the Chinese that are there, and there's a fair bit of quoting activity.

Jim Jarrell: Yeah, Michael, we currently are manufacturing components in Europe for the Chinese that are there, and there is a fair bit of quoting activity. It is a big growth momentum we are focused on in Europe at this point in time.

Speaker #5: It's a big growth momentum that we're focused on in Europe at this point in time.

Speaker #1: Okay. Perfect. Thank you.

Michael Glen: Okay, perfect. Thank you.

Speaker #3: Your next question comes from Tammy Chen of BMO Capital Markets. Your line is already open.

Rachel Smith: Your next question comes from Tamy Chen of BMO Capital Markets. Your line is already open.

Operator: Your next question comes from Tamy Chen of BMO Capital Markets. Your line is already open.

Tamy Chen: Hi. Good evening. Thanks for the questions. I will be quick here. On the industrial side, I just want to step back and make sure I understand the magnitude of the different moving pieces. It sounds like the 232 tariffs is really the primary reason for the segment's margins last couple of quarters, including this one, being below your normal range, and less so the ag segment having pressure because of the end market. Is that the case? The bigger hit has been tariffs on margins in industrial.

Speaker #6: Hi, good evening. Thanks for the questions. I'll be quick here. On the Industrial side—sorry, I just want to step back and make sure I understand the magnitude of the different moving pieces.

Speaker #6: So, it sounds like the 232 tariffs are really the primary reason for the segment's margins being below your normal range for the last couple of quarters, including this one.

Speaker #6: And less so, the Ag segment having pressure because of the end market—is that the case? The bigger hit has been tariffs on margins in Industrial.

Speaker #4: Yeah, I mean, for sure, tariffs have been a big impact. But I mean, the softness of the ag business has also played a role, obviously.

Linda Hasenfratz: Yeah, for sure, tariffs have been a big impact. But the softness of the ag business has also played a role, obviously.

Speaker #6: Okay. And specifically for Q3, so I know this—if you're looking sequentially, there's the seasonality in Industrial. But I'm a bit confused on the Q3 outlook for Industrial to have a double-digit decline in operating income year over year.

Tamy Chen: Okay. Specifically for Q3, I know if you are looking sequentially, there is the seasonality in industrial. But I am a bit confused on the Q3 outlook for industrial to have double-digit decline in operating income year over year. That would negate the seasonality. I would have thought with the access segments, the growth really accelerating here, that the outlook might be a bit better on a year over year basis.

Speaker #6: I mean, that would negate the seasonality. I would have thought, with the access segments, the growth would really be accelerating here—that the outlook might be a bit better on a year-over-year basis.

Speaker #4: Yeah, I mean, that is our current expectation. Obviously, tariffs are continuing, and we're having to factor that in from a conservative perspective. But, obviously, things could change over the coming months in terms of what the impact of the tariffs are going to be.

Linda Hasenfratz: Yeah, that is our current expectation. Obviously, tariffs are continuing to be a part of that, which we are having to factor in from a conservative perspective. But obviously, things could change over coming months in terms of what the impact of the tariffs are going to be. We all know there is discussions ongoing at the moment, so there is a chance that we see some changes there, which has not been factored in, nor has mitigation in our outlook.

Speaker #4: We all know there are discussions ongoing at the moment, so there's a chance that we may see some changes there, which have not been factored in.

Speaker #4: Nor has mitigation in our outlook.

Speaker #6: Okay. Got it. Do you think at this point with the demand there from the rental companies increasing fairly quickly in a matter of a quarter, do you think there's an ability for manufacturers such as Skyjack to possibly pass through some of the tariff cost just because it sounds like if I listen to the rental companies that there's they can't get their hands on enough of the equipment at this point?

Tamy Chen: Okay, got it. Do you think, at this point, with the demand there from the rental companies increasing fairly quickly in a matter of a quarter, do you think there is an ability for manufacturers such as Skyjack to possibly pass through some of the tariff cost? Just because it sounds like if I listen to the rental companies, that they cannot get their hands on enough of the equipment at this point.

Speaker #5: Yeah. I mean, if we're talking about passing on to customers, it's always a sensitive subject. Then you're up against other competitors. So, I mean, we work those one-offs with each customer, of course.

Jim Jarrell: Yeah, if we are talking about passing on to customers, it is always a sensitive subject, and you are up against other competitors. So, we work those one-offs with each customer, of course. If we can get a better price, we are going to do that. The other way is you can get a customer, a rental company, to say, "Hey, we would take a lot more of those pieces of equipment in Canada or wherever," and you make them in Canada, you are better off. So we do work with customers directly on both the commercial side or where they go, right? If you can mitigate tariffs that way, even better together.

Speaker #5: I mean, if we can get a better price, we're going to do that. I mean, the other way is you can get a customer or a rental company to say, "Hey, we would take a lot more of those pieces of equipment in Canada," or wherever.

Speaker #5: And if you make them in Canada, you're better off. So we do work with customers directly on both the commercial side or wherever they go, right?

Speaker #5: And if you can mitigate tariffs that way, even better together.

Speaker #6: Okay, got it. And so my very last question is on the Mobility side. I'm curious, what's driving the very strong new business wins in Canada?

Tamy Chen: Okay, got it. My very last question is, on the mobility side, I am curious, what is driving the very strong new business wins in Canada? Where I am getting from is, I think some people reading the headlines of some of the OEMs talking about onshoring, specifically going back to the US. How would you be impacted by all of that? Are you different because the components to the powertrain that you would supply, those areas not really as big of a focus for the OEMs to specifically onshore back to the US? Thanks.

Speaker #6: And where I'm coming from is, I think some people are reading the headlines from some of the OEMs talking about onshoring, specifically going back to the US.

Speaker #6: How would you be impacted by all of that? Are you indifferent because the components to the powertrain that you supply, are those areas not really as big of a focus for the OEMs to specifically onshore back to the US?

Speaker #6: Thanks.

Linda Hasenfratz: They don't need to onshore from Canada. We're already onshore. We're inside North America, and under United States-Mexico-Canada Agreement, which is still in full force, there is zero tariff on auto parts. The onshoring is coming from overseas. It's coming from Asia or Europe, and Canada is a winner in that. That's why we're winning business in Canada and the US, and Mexico for that matter, is because of the onshoring into the continent of North America.

Speaker #4: They don't need to onshore from Canada—we're already onshore. We're inside North America, and under USMCA, which is still in full force, there is zero tariff on auto parts.

Speaker #4: So the onshoring is coming from overseas; it's coming from Asia or Europe. And Canada is a winner in that. So that's why we're winning business in Canada, and the US, and Mexico, for that matter—because of the onshoring into the continent of North America.

Jim Jarrell: Yeah. In fact, just to give some other ideas around this, we have a sales program called MCMAGA. It basically stands for Make Canada, Mexico, America Great Again sales program, which is really directly bringing onshoring back to North America, where people want to have manufacturing done. What Linamar can do is offer any of those regions, Mexico, US, or Canada, and we think we're bigger, better together overall. A great example, we won a massive job, and our customer wanted to have it in the US. We sat down with them and said that in fact, our process capability, our ability to launch this would be better to do it in Canada. We collectively agreed we would do it in Canada because that's where the expertise was.

Speaker #5: Yeah. In fact, just to give some other ideas around this, we have a sales program called MCMAGA. It basically stands for Make Canada Mexico America Great Again Sales Program, which is really directly bringing onshoring back to North America, where people want to have manufacturing done.

Speaker #5: And what Linamar can do is offer any of those regions—Mexico, US, or Canada—and we think we're bigger and better together overall. A great example: we won a massive job and our customer wanted it to be in the US.

Speaker #5: We sat down with them and said, "But in fact, our process capability—our ability to launch this—would be better to do it in Canada."

Speaker #5: And we collectively agreed we would do it in Canada, because that's where the expertise was. So, I think they really looked beyond that short-term issue and looked at, “Hey, what's the right thing for that program, that job?” And of course, in that case, it was into Canada.

Jim Jarrell: I think they really look beyond that short-term issue and look at, hey, what's the right thing for that program, that job. Of course, in that case, it was into Canada. We have that flexibility to offer those three regions and we'll work with customers on what's the right solution.

Speaker #5: So we have that flexibility to offer those three regions, and we'll work with customers on what's the right solution.

Speaker #4: Yeah, and onshoring is being driven by trying to avoid tariffs. And there are no tariffs from Canada into the US or from Mexico into the US.

Linda Hasenfratz: Yeah. Onshoring is being driven by trying to avoid tariffs, and there's no tariffs from Canada into the US or Mexico into the US for auto parts that are United States-Mexico-Canada Agreement compliant.

Speaker #4: For auto parts that are USMCA compliant.

Speaker #6: Got it. Thank you.

Tamy Chen: Got it. Thank you.

Speaker #1: Our next question comes from Jonathan Goldman of Scotiabank. Your line is already open.

Rachel Smith: The next question comes from Jonathan Goldman of Scotiabank. Your line is already open.

Operator: The next question comes from Jonathan Goldman of Scotiabank. Your line is already open.

Speaker #7: Hey, good evening, team, and thanks for taking my questions. Maybe just a housekeeping one—I apologize if I missed it. Did you get any IEPA refunds in the quarter?

Jonathan Goldman: Hey, good evening, team, and thanks for taking my questions. Maybe just a housekeeping one. I apologize if I missed it. Did you get any IEPA refunds in the quarter? If so, are you able to quantify the amount? Also, were those adjusted out of adjusted EBITDA if you did receive any?

Speaker #7: And if so, are you able to quantify the amount? And also, were those adjusted out of adjusted EBITDA if you did receive any?

Speaker #5: It was minimal. I mean, very, very little.

Jim Jarrell: It was minimal. I mean, very, very little.

Speaker #7: Okay. Thank you.

Jonathan Goldman: Okay.

Speaker #5: I can't. Yeah.

Jim Jarrell: I can't. Yeah.

Speaker #7: I guess another one—maybe Linda, or whoever wants to take this. I'm interested in your thoughts about the proposed US 50% content rule. Aside from all the onshoring and tariff stuff, would that rule, do you think, impact your business positively or negatively?

Jonathan Goldman: I guess another one, maybe Linda or whoever wants to take this. I am interested on your thoughts about the proposed US 50% content rule, aside from all the onshoring and tariff stuff. Would that rule, do you think, impact your business positively or negatively?

Speaker #4: Yeah, I think that there's already a strong level of U.S. content in most vehicles being built in North America, simply because of how the supply chain has developed.

Linda Hasenfratz: Yeah. I think that there is already a strong level of US content in most vehicles being built in North America simply because of how the supply chain has developed over the last 30 years. I mean, there is strong capabilities in Canada, strong capabilities in Mexico, and strong capabilities in the US, and significant capacity in each region. It is not surprising that given the highest level of population and automotive vehicle assembly is happening in the US, that there is a very high level of content coming from there as well. Personally, I do not see that there will be a big impact on that. I will also remind you, we have 22 plants in the US, and if there is a push to push more into the US, then obviously, that could be an advantage for our US plants.

Speaker #4: Over the last 30 years, I mean, there are strong capabilities in Canada, strong capabilities in Mexico, and strong capabilities in the U.S., with significant capacity in each region.

Speaker #4: So it's not surprising that, given the highest level of population and automotive vehicle assemblies happening in the U.S., there's a very high level of content coming from there as well.

Speaker #4: So personally, I don't see that there will be a big impact on that. And I'll also remind you, we have 22 plants in the US, and so if there's a push to move more into the US, then obviously that could be an advantage for our US plants.

Speaker #7: Okay, that's good color. Maybe just one more from me. We've seen some announcements and headlines about the US OEMs talking about potentially moving into other verticals and industries to kind of maximize excess capacity, whether it's GM and defense.

Jonathan Goldman: Okay. That is good color. Maybe just one more from me. We have seen some announcements and headlines about the US OEMs talking about potentially moving into other verticals and industries to maximize excess capacity, whether it is GM and defense or Ford and battery storage. They have talked about getting the supply chain in order. Have you had any conversations with OEMs about these potential entry points?

Speaker #7: Or Ford and battery storage. They've talked about getting the supply chain in order. Have you had any conversations with OEMs about these potential entry points?

Speaker #5: Yeah, we have. On both accounts.

Jim Jarrell: Yeah, we have on both accounts.

Speaker #7: And could these opportunities be material for Linamar?

Jonathan Goldman: Could these opportunities be material for Linamar?

Speaker #5: Sure. I mean, the defense side, as you know, I've mentioned that. I mean, we've reached out to primes, and we would consider GM Automotive Mobility one of those primes as well, which we've reached out to.

Jim Jarrell: Sure. I mean, the defense side, as you know, I mentioned that. We reached out to primes and we would consider GM automotive mobility one of those primes as well, which we reached out. So again, they look at capability and of course, our core capabilities match what they are looking forward to. So yeah, those discussions are underway.

Speaker #5: And so again, they look at capability and, of course, our core capabilities match what they're looking for. So, yeah, those discussions are underway.

Speaker #7: And do you have a timeline on when that might show up, if you do get any wins there?

Jonathan Goldman: Do you have a timeline on when that might show up if you do get any wins there?

Speaker #5: No idea at this point, really. I mean, again, we're in the infancy stages of those discussions. But again, Linamar is probably a well-known supplier to General Motors.

Jim Jarrell: No idea at this point, really. Again, we are in the infancy stages of those discussions. Linamar is probably a well-known supplier to General Motors. Whatever they get into defense in Canada, we are going to be participating in at their time schedule.

Speaker #5: So whatever they get into, defense in Canada, we're going to be participating in at their time schedule.

Speaker #7: Okay, thanks for taking the questions. I'll get back in the queue.

Jonathan Goldman: Okay. Thanks for taking my questions. I will get back in queue.

Speaker #5: I think it depends. It's also driven by governments and when they're buying. Yeah.

Jim Jarrell: I think it depends. It is more driven too by governments and when they are buying. Yeah.

Speaker #1: Ladies and gentlemen, as a reminder, if you have a question, please press star one. There are no further questions at this time. I will now hand over the call to Linda Hasenfratz for closing comments.

Rachel Smith: Ladies and gentlemen, as a reminder, if you have a question, please press star one. There are no further questions at this time. I would hand over the call to Linda Hasenfratz for closing comments. Please go ahead.

Operator: Ladies and gentlemen, as a reminder, if you have a question, please press star one. There are no further questions at this time. I would hand over the call to Linda Hasenfratz for closing comments. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Thanks very much. Okay, to wrap up, I would like to leave you with our key message for the quarter, which is exactly where I started out.

Linda Hasenfratz: Thanks very much. To wrap up, I would like to leave you with our key message for the quarter, which is exactly where I started out. Again, we are thrilled to see record sales and strong EPS growth of nearly 10% in the quarter in a challenging environment. We are particularly happy with the performance of our mobility group, achieving record sales and earnings and growing market share in every region. We are excited by the excellent level of new business wins we are seeing in the mobility group overall, but notably in Canada and the US, with a strong pipeline still in the quote process.

Speaker #4: So, again, we're thrilled to see record sales and strong EPS growth of nearly 10% in the quarter, in a challenging environment. We are particularly happy with the performance of our Mobility group, achieving record sales and earnings and growing market share in every region.

Speaker #4: We are excited by the excellent level of new business wins we're seeing in the Mobility group overall, but notably in Canada and the U.S., with a strong pipeline still in the quote process.

Speaker #4: And lastly, despite a tariff-crazy world, I'll just remind you we still have more than 90% of our sales this year not impacted by tariffs at all, and are not letting the tariffs that do impact impede our promise to grow top and bottom-line growth again this year.

Linda Hasenfratz: Lastly, despite a tariff-crazy world, I will just remind you, we still have more than 90% of our sales this year not impacted by tariffs at all and are not letting the tariffs that do impact impede our promise to grow top and bottom line growth again this year. Thanks very much, everybody, and have a great evening.

Speaker #4: So, thanks very much, everybody, and have a great evening.

Rachel Smith: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Linda Hasenfratz: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

More LNR earnings call transcripts

Browse all earnings call transcripts

Q2 2026 Linamar Corp Earnings Call

Request TrialDemo

Linamar

Earnings