PHIN - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the PHINIA Fourth Quarter 2024 Earnings Call [Operator Instructions]

I would now like to turn the call over to Kellen Ferris. Kellen, the floor is now yours.

Kellen Ferris

you. Thank everyone. morning, Good joining you us. appreciate We

in materials Our webcast. are deck this also referencing and issued on conference that this PHINIA's via be slide call available a Investor morning including We're were Relations call remarks. our we'll broadcasting website,

today us Ericson, are and Brady Chris Joining CFO. Gropp, CEO;

statements and variety make may risks to and factors, Actual results During will which described SEC based subject forward-looking this in call, a on filings. are are materially due from including those these differ statements, of we management's to current expectations our uncertainties.

turn And call with that, it's my to pleasure to the Brady. over

Brady Ericson

highlights Thank I'll then on thoughts and you, start XXXX thank the financials provide everyone, beyond. morning. overall XXXX then then provide our for discuss Chris some our us guidance. XXXX questions. comments up on on this We'll the you, additional open and Kellen, with call and and detail fourth some for and quarter will joining year the full

X Starting on of Slide deck. the

During results Strong quarter, we offset as by operating segments. similar performance QX were sales experienced segment System top in and to the environment the margin industry by the a but with lower what soft the line good fourth were Fuel sales. Aftermarket reflect environment macro

As X.X% contract some manufacturing were quarter from net the a down year, result, which included revenues. sales $XXX the of million, in the prior same period

sales added as stand-alone to were particularly second decrease. margin supplier year-over-year pleased support Encouragingly, the a of incentive compensation we win our a million The and EBITDA I'm We the significant XX.X%, with of defense $XXX point and infrastructure winning savings of XXX annual industry. aerospace more entity. adjusted by reported than are offset business, higher new benefits decreases, business in a basis product positive and with

when point the Total XX.X%, XXXX. XX compared operating improvement segment margins were basis a quarter with adjusted fourth

strong million, sheet with of equivalents at $XXX the $XXX cash cash Our from while million, XXXX. healthy remains cash adjusted flow year-end was up balance $XX free and at million

is This to when liquidity via dividends us $X the revolver. total billion million and share $XX during to buybacks our quarter. considering fourth undrawn shareholders approximately enabled Our performance return

and wins. Let discussion us a X Slide move new business for of X to now

ongoing market-leading continued into lines product well product reflected new technology Our new providing across on of wins in as focus our the is new expansion and markets. verticals business offering significant being as

Let me few. a call out

light industry system; Our second extension product with defense win for key GDi South American the vehicle market. injector a extension a the in with post-combustion a contract and aerospace program manufacturer; engine a medium-duty

Our in won Aftermarket America products to segment signed won distributor and Asia. business new new a a customer, Southeast of a business OEM subsidiaries Europe, major at business in customer to contract supply in multiyear support developed growth Europe to CV a in with South remanufactured major incremental major

underscores markets, the building ultimately Finally, Aftermarket product for our all offering, more geographic our SKUs the and benefits business X,XXX on across and serve improve global customers needs. over Winning regions better customers' coverage lines our our of our to footprint. year customers our and introduced of expand core, in we end diversity of this

passenger added and cars, OE then light market mini which LPV vans Now into OE, and vehicle vehicle commercial crossovers includes OE the clarity light or trucks into separating includes to more X. some Slide passenger OE which and vehicle moving LCV by We've end also OE, vans, light SUVs. or

are and may market the usage, some closer dynamics buying vehicle. product with decisions Although LCV overlap to and different commercial LPV, have

was XX% was and combined and XX%. our Our vehicle OES of OE commercial markets revenues. totaled Aftermarket XX% LPV Independent

sites exited limited strong footprint site perspective, in former XXXX a we've reduced as Europe. maintain We regional we parent continue diversity in concentration one of From to customer and also levels. our one

next Slide for of performance 'XX our XXXX to objectives. a Moving X summary and

launched new new successfully parent, and front, our with the amount drove former and we improvements. exited entered On the business, CMAs supply markets, products, all chain of won efficiencies, new TSAs innovative gained operations a significant

to and capital cash efficiencies in X sheet year the lowered returned XX.X%. and position, working $XXX and maturities our year. financial closed lastly, via rates, $XXX margin removed covenants. with to we've was million. Adjusted respect strengthened With achieved million shareholders we balance restrictive share EBITDA our Adjusted buybacks extended our that our And dividends at refinancings free the flow

For manufacturing leveraging financially industrial efficiently OE continuing XXXX, focused and human our we're commercial journey: our being on aftermarket, and capital. our focused and business disciplined, on growing

to direction value. in shareholder on Now be Slide focused long-term to continue disciplined change moving on here, maximizing X. financially Really and no

exit we evidenced, liquidity X.Xx through leverage and after the to $XXX of XXXX. net XXXX returned having plenty of of with As million shareholders a end

strong position free business. of We generating and cash a flow excellence, XXXX operational strength, are commercial entering we've a that financial discipline from position earned a and with through

$XXX purchasing declared flow compared an the and dividend that execution increase the generation XXXX our and announcing dividend we paid of program Board in As share, strategy. X% per reflect actions quarterly to same confidence the Board's year. These an by our our in the approved strong by $X.XX of XXX,XXX our of started quarter increase a repurchase last cash Directors share another million over of and such, today shares in of business

proposition execution delivers and capital to to growth our financial strength, successful allocation compelling investments profitable strategy, a proposition, We disciplined shareholders. a coupled with our distributing drive believe that capital investor balances of disciplined

all across results we past this of In closing, together who deliver company how would very worked have to the I to solid associates year am reported note today. like the I proud our of

it through year. to I'll our who walk QX our and Chris, outlook hand us And results discuss with Chris? over will that, the for

Chris Gropp

ensuring joining fourth and report Thanks, to to to report to the their we want in forward. morning. this during for us business I Brady, also and drive solid results for rapid continued in the am successfully I thank efforts globe are we all that responding we quickly you quarter, the pleased execute our market able to methodically across employees our discussing today. were and out thank conditions, changes

of As discuss will both today's all found non-GAAP presentation, press which website. the a reconciliations measures release that in are financial I can of on and be in reminder, our

Page down Revenue the deck. fourth reflects in generated the to similar a XX $XXX to versus XXXX in we quarter in sales, as Moving market ago. quarters year million trends in earlier X.X%

was this ended Excluding contract year, year-over-year. in for X.X% earlier manufacturing sales QX sales reduction the that

benefited a segment increase aftermarket pricing and from volumes expanded. X.X% as volume year-over-year Our regions of across all higher for

by contrast The in Systems decline X.X%, contract or down China, revenue CV to is lower effect manufacturing. in of Systems were growth commercial the in sales including contract attributable prior by Americas. XX.X%, partially Fuel year sales or Fuel and segment the excluding vehicle Europe offset manufacturing

Adjusted basis million million $XX points. $XX income of and X.X% operating a adjusted with operating was decrease XXX year-over-year which margin, a represents

Adjusted EBITDA Systems. $XXX points. Page conditions a margin XX. $XX Margins of year-over-year to in and a from Moving Fuel XXX conditions was Margins and Systems. favorable basis XX.X%, representing of benefited benefited million Fuel in favorable million decrease from

by this half through corporate reliant offset had were been full the still as completed of end XXXX first of we However, corporate costs staffing XXXX. by and the upon not TSAs was higher

XX% rate effective guide ETR a to disappointing of the XXXX end of above XX.X%, or XX%. high tax adjusted ended with of We our

effort market structure, should pour have to will substantial into into and translate and ETR. adjusting our legacy which time We level continue

as Our margins. From by share solid adjusted the in was excludes noted. overall our and noncomparable of net ETR in performance which fourth which items, a our appendix earnings per high the affected $X.XX, reported quarter described diluted presentation are business standpoint, core our segments

segment partially lower segment margin QX was points, decreased to Aftermarket healthy margins margins. Aftermarket partially adjusted higher margin the at basis by offset XXX of to increases. primarily basis other by at XX.X%, XX year-over-year, an volume increased due Systems, freight ending quarter offset points and XX.X% Fuel in due charges, operating increase

segment were Systems due at by volumes. strong cost XX.X%, recoveries margins up points to Fuel offset supplier and lower year-over-year XXX price, basis customer savings favorable QX

Pages year, the and adjusted can adjusted for Let XX me our in full XX now bridge the you presentation. and find revenue which on EBITDA

performance in offset and in was aftermarket higher for volume, by headwind softness million partially of was the $XXX impacted by sales sales and growth in Our Europe sales. in on a sales CV Americas the lower China, year which lower

million, the employee sales. costs with in mix strong reduction was totaled a and the million. Volume supplier recoveries year adjusted partially increases of on X.X%, sales Pricing, of manufacturing the XX% of by for which increase savings along $XX contribution Systems the in offset change offset million margin. no normal and down Fuel in and in ended decrease $X.XX margin Aftermarket We degradation with a sales billion, $XXX year in or X%, Adjusted with an EBITDA with XX.X%, despite continued was in other X.X%. of $XX sales

built million, and fully by as in was along costs Corporate other spending. out XXXX the increased with R&D function increased $XX

quick Now maturities credit for and recap rates amending interest important throughout was extending our an us balance We initiative sheet sheet for a in and completed lower flow. our year. cash refinancings, Strengthening facility. the and balance of resulting X out debt our our

and As a under facilities liquidity result, cash our available current of $X substantial credit we ended with approximately capacity the cash billion. and year equivalents with

million operations QX year. was from $XX full cash in the $XXX Net and million for

in of processes. full year adjusted $XXX the the free continue as million, daily and prior of for we up year be flow was Adjusted $XX cash million. disciplined working resources $XX we in drive management and free of cash capital our optimization million generated to During flow quarter, period from same the of the

quarter full the share million were new repurchases of in front, we machinery sales the new and the million. X.X% On and used equipment year. X.X% for capital was and quarter of allocation dividends program the completed spend of million in totaling Funds launches. and for was primarily $XX in $XX paid investments $XX for Capital

a discussion performance. Slide industry overall for of Now moving to XX

to We experience industry low expect are experience in XXXX. single-digit mid-single-digit expect contrast, increased sales Light be similar we globally. XXXX the the those industry by ICE vehicle varying expected CV that in to range By trends region. range, low are the the sales to to in down to in

would, consolidated excluding in a rates. effects therefore, the expect exchange to increase a a basis, of sales, flat On we modest year-over-year

to We the rebound. level half CV modest sales of last of as in the as the expect half begin the last with XXXX half increase the in year sales same first a of

to a Going related into anticipate of headwinds XXXX, stronger also exchange the rates U.S. with dollar. we backdrop

industry generated of range from the more foreign Based a our $X.XX sales As a exchange. of than sales the and XX% outside overall for U.S. which a net between negative expected our is approximately upon dollar, expectations to impact be reminder, are million $X.XX billion, XXXX billion adjusted includes for performance and U.S. $XX stronger

Overall, projections we changes that develop plans could ramifications reform base, projected policy cash with Adjusted This solid an will both new efficiencies appropriate as related to includes with Note EBITDA have continue margin no is borne drive we tariffs, earnings inflate by areas XX.X% of we to our to XX.X%. additional or or new and expect as million none or million policy in XXXX growth monitor to of to any expected $XXX cost for be and although PHINIA. affect the by possible include will to in that for outlook U.S. EBITDA cost search tax other our of generation and continue revenue the operational segments. to and $XXX any to be administration. deflate continue

generation and actions drive we are to continue solid closing, sustainable and the strategic growth. In flow have that meaningful cash undertaken expected

Our us our and employees. focused to we flexibility future strong are current creating financial initiatives, and customers on growth sheet very for our shareholders, provides and value support balance with

and lines the to want we you will to Operator, our now of you for thank attention questions? call. Q&A move all open the could today, for I please portion your

Operator

[Operator of the Northland Bobby comes first from Markets. Instructions] question Capital from Your Brooks line

Robert Brooks

we guys I us forward? machines going on of thing color you margins you expect the $XXX a are was What associated million And first programs new with? new So new more that? just program machinery, CapEx for lift in it these ask, quarter, did bit give wanted investments help could mentioned in maybe mostly for they to Could launches.

Brady Ericson

Yes.

one, not $XXX the for the quarter. just think, the I to million was clarify, for year,

in came really I quarter not X%. major There's program. year just again, out And think it's million. one was the full over really world. the about $XX yes Yes, spread around at

going some I on think and job But a coming be as of are supporting did coming possible. the all back being as in year are CapEx the team the as launches that efficient cutting well. primarily nice these to new

So most going expansion. is be launches new of it to and for product

Chris Gropp

related upcoming... on CV of going to There's expansion a for material the amount

Brady Ericson

Pre-buy.

Chris Gropp

Pre-buys.

that programs next being over existing the of improved. that couple generation, are also of it's it's also next It's and years. So for like capacity the expansion

Robert Brooks

to so mentioned kind My Yes. the defense guys within aerospace of that. -- it. mistake second Got and But guys transitioning you then win had on the you -- -- market.

wondering, just markets? was is you've from to one? off come completely just previously new was these same are I the wondering, was aerospace a customer that first serve mentioned Also, So defense upfitted going to that and line this products the I

Brady Ericson

it's same same in kind type that now, same will using be of Right the Yes. those and customer, of facility equipment. it

I aerospace in one year. this quality of first our just aerospace pace QX on think note, early of QX folks, here actually our getting the end our of remind to thing to support of certification SOP quality in we're certification, QX, that in

Robert Brooks

that be talked about like was to markets X kind would of guys previously, defense to discuss good to then you've the of end market, on first programs And like guys you these of and of why like, do or great. why aerospace and continue you getting stepping and I reminder programs maybe projects the defense back diversify a just it a and you our this. forward? to following bit And you hey, think just why why revenues really just you've That's that. up give in just honed know into let's is -- going in won aerospace think it new but one on like I win can kind kind

Brady Ericson

leverage capital for our -- in core manufacturing our opportunities we and competencies our capital. human Again, were our could both looking that existing

so these management are off-highway of opportunities aerospace and And industrial and in and and our core that's opportunities all leveraging that's fuel and precision controls capabilities. marine are those leveraging competencies

opportunity why see of to and those looking of steady as kind that's we for long-term we profitable, a those us. one reasons So new into the were expand markets,

we're plus holding it's positive. have absolutely of very, and our away came blown of capabilities, we're think, for tolerances the some in as we think or looked winning, high kind aerospace inspection minus I that the volume, they I that that and why they companies are been and products, in came micron X.X were capabilities of some at some of in very our

lot I'm more expecting through a lot -- more a coming we RFQs have now.

again, more the footprint I supplier quality a And really here a had years. and issues validation looking getting has design fragmented manufacturing we lot had a volume into QX has challenges. us. for capability challenges see again, the and great and for of think ways, And to and a that side, base in quality they is aerospace up doors us, our as a that lot got support going And They've them. certification that for. global they're stable, many open similar, they've capabilities, to have reliable supply

Chris Gropp

existing capital. allows volume It use to very also And different. us are the because profiles

smaller an much a volumes then about talking aerospace, dedicate are capital to you're and much it higher, the even take If pass base. volume CV, you that same or car

on overall. You're but higher capital, much the able same to the revenue produce on it

it's sort production sitting utilize floor. very us that's already of on complementary, and it -- the So that helps it's capital

Robert Brooks

enough. of great Fair a That's that. Yes. overview

Operator

from Your Jake line next question the Management. of BNP Paribas comes from Asset Scholl

Thomas Scholl

to Congrats year. a strong on finish the

right, the So looks I you help just a I my like so targeted the XXXX. headwind remains tax understand If And more a the there high dig math $XX tax... to impact minimum little rate on any of wonder, from rate in just million global tax wanted is me in if why taxes. is XX%. about versus can long-term

Chris Gropp

it Yes, mean I'll worked I we've take Jake, one. pretty was it. disappointing. that on

us and hard exist actually, it has some we're was eliminate that the quite We worked to Phase X. think it. structure. -- going Phase done that and is inefficiencies trying anything, hadn't it's there it finished take team finishing But of now You on out but my would the X, we overall in longer, to

not the in next than their bit local a that a carryover reduction had ended of 'XX We That with showing existed little we trying overseas a a taxes of expected. as up out. locally, more cleans structure give I'm the be X old a Phase and year. major X carryover little be very project have conservative it's We're Phase But areas bit it units settle lot guys X. lifting. to space. at we of a of heavy that because are a long-term very particular now concurrently to some from and my sort This is start and we regions difficult and structurally, going taking

not a thing do through to it. you can So just It's overnight. work we're short-term going

Thomas Scholl

And us by expectations could color your of a little also you guys segment? on bit just give

Brady Ericson

from standpoint, of I vehicle CV, the maybe think we overall segment in as second primarily a softness seen still an on and light Yes. global overall bit the you've I mean year. half from little but market, of see upside

I our going we FS -- more Aftermarket to see segment Systems So offset to and going continue is to our revenue is Fuel think than and volume have segment. with that being pressures,

And And to see chunk -- the Chris continuing away of kind of mentioned, will kind and of 'XX soft. I with progress. this year Aftermarket market OE we was tough another as half be second a think our of so

with least the soft to vehicle commercial driven through expect first continuing recovery half, some that half OE the the We side. in at from be on second primarily side the

the OE the of additional kind OE what of them With our said, our side kind opportunity. because year, they folks that. down, a aftermarket that excited Aftermarket is that even of we've offsets mean, good that's I And is are seen when know gives last chunk down

Aftermarket is our down the business we of one and when OE even -- to that size volatile. the cushion market is between lot balance and that, of continue a gives things to nice the highlight of that folks that's large So and us

Chris Gropp

you up at And held look, earnings actually on the perspective, the despite reduction quality if quality Aftermarket of year, sales the from a in higher improved if for for each. quality look And full we also FS, of earnings the you earnings. side

So the and in top bottom units really all the all, soft managing. good quite a did line, even well, the line held with up job

Thomas Scholl

congrats a very great an year helpful. again on And It's first full as company. independent

Operator

comes line UBS. Your next Joseph of Spak from from question the

Unknown Analyst

on is for This Gabe Joe.

alongside dividend in you program. the the saw an quarter that I buyback this So raised increase

to you So forward, on know there's remain still probably cash capital how and that's about sheet. CV talked some wanting you'll I aftermarket excess allocate inorganically. but But the balanced in encouraging. you balance going grow

M&A, potential opportunities you we up how sizing as you're the at think So look the about should potential in market?

Brady Ericson

Sure. the We're always be standpoint, it's Yes. level, it's commercial specific say thing. looking an primarily is in disciplined. to a to assets we're acquisition going communicated, and increased bad exposures. buybacks. Cash, expand yes, it's going hard -- that From cash which we've is coming financially continue we've But to higher our higher than our some of probably why aftermarket are as industrial vehicle, to target for

profitable, to have and and current are in we're -- valuation shares. to back why that have bottom going to as our we that going we're valuations line continue but that our or disciplined buy be we at to money, But companies are a undervalued, add ensuring there We that below also making EPS our that feel are still company. that's

we're able think those to some there we'll next be I As and may few more we find deals confidence some deals I that close in that and announce on think that meet good hopefully criteria opportunities that quarters. be assets, getting the

Unknown Analyst

is my on then offsetting GDi. tougher industry just And follow-up the color. helpful outlook some with That's

you from past efficient penetration I what market. GDi the that half bar, past is more uplift think XXX mid-teens is with share your strengthened that year? And we content the XXX What's sort market market current combustion about over as move you How to comes of of the in in bar level of the position the in today? have mentioned that?

Brady Ericson

that's kind perspective on global increase mean Yes. have a not in think and steady whole GDi, may of gain share bit, to kind XX%, in -- share. now, number a the of we're penetration still a market the I continued still rates but range. XX% it's GDi, right lot. market From a we're mid-teens We

more number the be won We've new that a year. some launches, programs coming on especially think I we'll next the XXX see bar. of year launching in will and

allow share will it our customers. to And gains value we a support our market think adds of continued that lot to us because

of the a increase, and from lot, Now the replacement itself, content to is winning whole XXX a that's it's because we're market why bar. a not of there's one share product advantages drop-in the

a changes Just to in order are performance. few needed get additional that

little some but a up of for customer bit content it's the we're there's the is is value good, share. the so for really why market increase providing which picking a And of us,

Operator

next Your Instructions] David from & line question CL King [Operator comes Associates. of the from Silver

David Silver

judgments GDi little alternatively, you short, have to coming where where question you a I guidance there if most number if discussed, be? just year. you you of know the likely greater is the you could think to make. which Maybe to maybe upside about overall think overall assumptions -- forecast? do adoption, for might were were your you where say, just mind, it there's I -- your you if had that but fall top source wouldn't to weakness you be a might And do if And exceed, the of line, and on a let's

Brady Ericson

one standpoint, the second far vehicle doesn't on biggest the and rebounding half. coming I as commercial of that's probably occur, a guide the as If have from that downside. assumptions we is big stronger Yes. concern in that mean in the

in it's and the if stronger even upside, side markets -- of wars global kind comes by solidify of the that vehicle aren't the a affected to trade kind and the continue lot are if on. on it of going On light

and light So OE some markets total, OE the up, of a bit, still inflation forecast vehicle means the year-over-year going that's basis down to start of I interest a some in vehicle light the on think of think current I upside be down picking has even volume down more. kind which combustion if because is global come overall down little rates stays

and seem the to buy business. combustion more numbers chasing upside in always our little weakness that's quickly in upside can materialize always bit to year, potential be there's And on of as continue adoption They hybrids the people year. EV if still and opportunities a this our new that well. I in there's relatively think so And Aftermarket

else. the -- side, going the I dollar OE business effect markets going a of the a be of we because kind expected. is stronger think the to as it's It's anything have over in than of because way. of coming to or be translational our all highlighted, not on And to adoption that translate we weakening going of then U.S. very in we abroad, positive to our numbers Chris

the And give gets right That's dollar at rates well. $XX as us now, that weaker versus currencies, of a of now. the some upside will current the basically we've in has the right as where are they exchange kind If global forecast that noted headwind million, that deck.

Chris Gropp

want The out to other consumer. don't is end item, necessarily I They mean, buy. chaos squirrely in never go get the and for market and the good

for the Now terms big think little this. The CV EVs, numbers out Could incentives but doing The that pre numbers they side out the help signals and they're good, don't in coming. car? pass is that GDi are is I being on to that's numbers. mixed careful players flip drop Possibly. are they -- if think the the a outlook they're I prebuy looking do still pretty think there signaling, into built of

in actually efficiency. don't which a has is they've generation, in next see changes it -- this negative any regulations as because them of Most built

the So little pushing predicated is on they it's going think in those actually and mean is users. worry. going all to the to bit sales out there, that's end attractive that, be more market this of a to help of I

all. at helpful never that's So

David Silver

a ask hours. there. I a what you about key in? a That's where of talk this, A I about I some color I is thinking ask and could with but guess to But may they're this think phase current And probably lot say would I overlapping of great amongst for tariff-related it question, be customers, you answer. want did -- couple of their your just you

or different view the in further? X -- push with decision-making the Just programs. this in Does from do major out environment or Could slowdown mean, current overhang lines slowdown stretch the time there? forward out on decision-making I time your period a what of year and I customers lines last moving that you the hear in as tariff

Brady Ericson

more of supply I more them less And regionalizing plan China becoming the think were of the a the in reliant mean that's still American and of I lot already production I base, think on numbers. for there. North

I the with the Mexico, think, of bit Canada is blowup and of obviously, a USMCA and a think, I the potentially tariffs shock.

of lot the move through a of for and rational kind think that I folks is and hope forward. way in we'll a work that

the the is going Biggest can't risk by it's -- absorbed obviously, and to there, difficult absorbed it it's by be suppliers, OEMs. going probably to be to XXX% be

then going which effect have to an going to an is effect the have on obviously on So consumers, volumes. it's

best prepare that of there's that's thing probably couple know for. so can public And announcements I we out there. the a

America? offset that increases you going in tremendous to a currently would it's shift cost have plants both substantial in tariffs. Can production view, North move, a bit, not some my the to of enough bit? Maybe little Can if you you come and but move be, from little the amount proposed Mexico XX%

Chris Gropp

Plus thing think... And it's you can not I do. that a short-term

Brady Ericson

Right. while. to a Yes. let Yes. you... I'm It's going to going take

Chris Gropp

Yes.

in point means of is push XX% dollars total. very Aftermarket, a we China at China which couple all. little it's that through increase. revenue of of a tariffs on we million And from view, the have we can And immediately that only what do, price Now exposure a

customer exposure we for try But from in it it's to involved resource, end which we minimal again, side or that hurts can the have that China sure. again push Of cost course, the through. would would a

Operator

the of Your from Brooks Markets. Northland comes line next question Capital Bobby from

Robert Brooks

more ask Just wanted one back to and on question. jump

vehicle Because the off-highway? mentioned for PR was And they for wins going bit off-highway of vehicle were some the is commercial could wondering, that. of I know specifically, stuff? like kind Or market. the So But nice hoping if were I commercial guys on-highway we just it I a was any really you on for these more granular wins was forward. any get key -- expanding the of more

Brady Ericson

duty Yes. those were of extension. we I the I application on-highway, as highlighted that contract for mean lot off-highway off-highway and there, medium was I some mean think, both a the well. one

Operator

the of Management. Your comes Estes next from from Capital line Drew Banyan question

Drew Estes

on a taxes. Just follow-up

that said requires? that need are mean that you it regions does adjust you the Can footprint? Or elaborate, fix. that to called what to difficult You manufacturing out exactly X you structurally

Chris Gropp

holding It's company that structures are difficult.

once manufacturing. into it So really, of got But it's very expensive of it, can back paid, lot be that now, looking out, going is people implications it to on we're issue you at break examining if payback this longer-term whole down. quite we've back implications. pull to get what my compared expensive to I it -- trying The start them. and a out highly not mean, a the down we're break I to tax trying short-term getting into literally people are And the

Brady Ericson

again, that didn't for with a got we structure, sense legal for made it structure spun I the primary got total, make mean, when we sense Yes, spun, but us.

for Delphi made that primarily to having footprint. organization what areas try for operational makeup sense doesn't we're unwind. sense And the the of so look In that's our make to kind prior of to

Chris, that appropriate it's for them down, highlight It's some And sense locations IP to us. to shutting the so of plants. more moving makes entities, moving legal removing more not just

areas doing can't we're take is generate that lot a in continuing taxes to to what countries continue now, we while we're money. making right advantage of and other pay we NOLs that so we're And

of down financials. starts going to balancing the lifting the some to so flow those that's move And got some and entities some to and of require IP shut of get kind kind heavy a point to of it kind we've that and of out, of

Drew Estes

Okay. That's and about just very you how helpful. the programs. it second, And to spoke new attributable CapEx most was of

be assume legacy you curious, have do was state and volume, just the Difficulty]... didn't we unit steady and new Just if of it would you think kind programs what [Technical business the CapEx

Brady Ericson

X%... be the we're current launching If any it's those program launches at not in Our new some X%. probably going plan new of with to programs, is

Chris Gropp

Yes.

Brady Ericson

and and equipment maintenance facilities. the X% range as far as maintaining

kind refreshing years. improvement. need equipment. Now requires most to our supplier highlight, going tooling, X some adjustments every type X It are our and kind They remember some just new upgrade. capital programs They're some always of of some to to of to want of

you're some if see declining. you're money, revenues spending that And going of so to not

So and/or for because upgrade you I think it's and of always vehicle CapEx don't type to on they're improvement spend not possible going to maintain some need programs. revenues those

Operator

I'd [Operator to Instructions] Ericson. over call further like with Brady And the questions, back turn to no

Brady Ericson

as a value. Great. dynamic very company. Have questions. shareholder decisions Thank on continue to a stay of your really to proud good all market Appreciate We'll adapting financially day. your make stand-alone calendar great of as a great as maximize all full our on to Again, all this support focused continuing year disciplined you much. and employees well to

Operator

does this conclude And you. Thank today's call. conference

You day. now disconnect. may a great Have

PHINIA (PHIN) 13 Feb 252024 Q4 Earnings call transcript