Earnings Call Transcript - DAN Q3 2025

Operator, Operator

Good morning, and welcome to Dana Incorporated's Third Quarter 2025 Financial Webcast and Conference Call. My name is Regina, and I will be your conference facilitator. Please be advised that our meeting today, both the speakers' remarks and the Q&A session will be recorded for replay purposes. For those participants who would like to access the call from the webcast, please reference the URL on our website and sign in as a guest. There will be a question-and-answer period after the speakers' remarks, and we will take questions from the telephone only. At this time, I'd like to begin the presentation by turning the call over to Dana's Senior Director of Investor Relations and Corporate Communications, Craig Barber. Please go ahead, Mr. Barber.

Craig Barber, Senior Director of Investor Relations and Corporate Communications

Thank you, Regina, and good morning, and welcome to Dana Incorporated's Earnings Call for the Third Quarter of 2025. Today's presentation includes forward-looking statements about our expectations for Dana's future performance. Actual results could differ from what we present here today. For more details about the factors that may affect future results, please refer to our safe harbor statement found in our public filings and our reports. I encourage you to visit our investor website, where you'll find this morning's press release and presentation. As stated, today's call is being recorded and the supporting materials are the property of Dana Incorporated. They may not be recorded, copied or rebroadcast without our written consent. With me this morning is Bruce McDonald, Dana's Chairman and Executive Officer; and Timothy Kraus, Senior Vice President and Chief Financial Officer. Bruce, call is yours.

R. McDonald, Chairman and Executive Officer

Thank you, Craig, and good morning, everyone, and thanks for joining Craig, Tim, and I for a discussion here on Dana's Q3 earnings. Maybe just before I get into my slide here, just stepping back and talking about the puts and takes in terms of the third quarter. Here's what I see as the highlights. First of all, I think you'll see improving business performance, and that's something that we expect to see accelerate as we get into our fourth quarter. The driver for that would really be a few restructuring initiatives that have been completed or substantially complete and will start to turn from headwinds that are in our numbers right now with tailwinds for us going forward. Secondly, on the volume side, although we're down year-over-year, the comps are getting better. They're negative, but they're getting better, which drives improved financial performance. On the tariff side, we've seen less of a headwind, with minimal impact here in Q3. Our full year charge in terms of tariffs is lower than we thought a quarter ago. And then cost savings, we're on track to deliver the $310 million we talked about last quarter, but we are realizing those quicker, which is helping us uplift our outlook. In terms of negatives, I'd say we have some volume softness, particularly in CV North America and to a lesser extent in Brazil. We did have JLR down for about 5 weeks in the quarter, which were headwinds against us. Lastly, there have been some EV program cancellations, and we have some charges in the quarter associated with that, which we expect will recover in the fourth quarter. Just to touch on the highlights regarding the Off-Highway divestiture, that remains on track, and we expect to close later in the fourth quarter. We have received almost all regulatory approvals, with just one minor European country expected to wrap up in the next week or so. Our teams are working hard to manage the plethora of work streams to ensure an orderly transition during this quarter. Concerning capital returns, we discussed buying between $100 million and $150 million of shares in the third quarter, and we actually bought more than that at $9.5 million or 7% of our shares outstanding. We've had a 10b5 plan in place throughout the quarter. As of today, we've bought nearly 30 million shares or just over 20% of our outstanding shares, and we expect to complete the balance of the share repurchase next month. As I mentioned earlier regarding cost savings, we are achieving a good outcome in this quarter. We're nearing our full year run rate of $73 million and continue to seek other opportunities. I'm pleased with the progress our team has made bringing these numbers in line. The tariff situation seems to be getting a bit better. We are continually making progress on USMCA compliance, which alleviates the headwinds both from an on-charge perspective and the margin deterioration that we see. Our recovery rate is now up in the upper 80%. Regarding our outlook for the year, the light-demand for light trucks remains stable. We do face occasional production interruptions, but overall, the Light Vehicle market is looking strong for the quarter. In the Commercial Vehicle sector, we continue to see a deterioration in North America and less so in Brazil. However, the improved outlook for tariffs and quicker realization of cost recovery allows us to increase our full year guidance by $15 million at the midpoint. Within our guidance, we have factored in some volume catch-up related to JLR, the lower Commercial Vehicle outlook in North America in line with general estimates, and the latest Super Duty schedule releases that we just received this week. So in conclusion, a good solid quarter. Tim, I’ll turn it over to you to go through the financials.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Thanks, Bruce, and good morning to everyone. Turning to Slide 6 now, let’s review our third quarter financial performance. First, a reminder, results are presented excluding the Off-Highway business, which is classified as discontinued operations. Sales for the quarter were $1.917 billion, up $20 million compared to Q3 of last year. This reflects recoveries in currency benefits offsetting the impact of lower demand. Adjusted EBITDA came in at $162 million, an improvement of $51 million year-over-year. Our margin expanded by 260 basis points to 8.5%, driven by cost-saving actions and operational efficiencies that help mitigate the profit impact of lower sales and tariffs. EBIT improved significantly to $53 million from a loss of $8 million in the prior period. Net interest expense increased $11 million to $44 million due to higher borrowings and modestly higher rates. Income tax was a benefit of $2 million. While this is down $16 million from last year, we continue to benefit from positive adjustments to the carrying value of our deferred tax assets. Net income attributable to Dana was $13 million compared with a loss of $21 million in Q3 of last year, a positive swing of $34 million. Overall, these results demonstrate the effectiveness of our cost savings initiatives and operational improvements in offsetting market headwinds. Please turn with me now to Slide 7 for the drivers of the sales and profit change for the quarter. In line with the new reporting method, we have revised our presentation to include the impact of discontinued operations for the current and prior periods. The $579 million in sales and $121 million of profit removed from 2024 represents the Off-Highway business being sold and the accounting treatment for discontinued operations. Beginning with sales, this year’s third quarter volume and mix were $66 million lower, driven by lower demand in Commercial Vehicle end markets, partially offset by higher sales in Light Vehicle. Production disruptions at certain customers had minimal impact on Light Vehicle System sales in the quarter. Performance drove sales higher by $8 million due to pricing actions, while tariff recoveries totaled $49 million. Currency translation, primarily the strength of the euro against the U.S. dollar, yielded $21 million in higher sales compared to last year. Moving to adjusted EBITDA. Volume mix lowered EBITDA by $35 million. This was a decremental margin of about 50%, higher than we typically expect, reflecting significant mix changes and continued operational impacts within our thermal products business, including battery cooling. However, recall that we are breaking out performance, which includes efficiency gains in manufacturing separately. Performance increased profit by $11 million due to pricing and efficiency improvements across both segments. Cost savings added $73 million in profit through the actions we have taken across the company. This brings us to $183 million to date, and we are securing our increased target of $235 million in savings for the full year 2025. Tariff impact in the quarter was minimal at just $1 million. Due to the catch-up in tariff recoveries, we expect to see continuing profit headwinds in the future, but we do expect recovery of the majority of this impact this year. Next, I will turn to Slide 8 for details on our third quarter cash flow. As I discussed on Slide 6, the accounting for cash flow includes both continuing and discontinued operations as shown here on Slide 9. For the third quarter of 2025, we delivered adjusted free cash flow of $101 million, representing a $109 million improvement compared to the prior year. This strong performance was driven primarily by higher profitability and lower working capital requirements. One-time costs primarily related to our cost savings program were $17 million, which is $8 million higher than the prior period. Net interest increased by $11 million, primarily due to higher borrowing costs associated with the capital return initiatives. Taxes were lower at $47 million compared to $72 million last year, driven by the timing of payments. Working capital improved significantly by $76 million, reflecting better inventory management and timing of receivables and payables. Capital spending was $59 million, up $16 million year-over-year as we continue to invest in new programs to support our backlog. Overall, these factors combined to deliver a substantial improvement in free cash flow, positioning us well to achieve our full year target. Please turn with me now to Slide 9 for updated guidance on continuing operations. For all our targets, we have narrowed our ranges as we approach the end of the year as we remain confident in achieving our targets. We expect sales from continuing operations to be approximately $7.4 billion at the midpoint of the tightened range. Adjusted EBITDA from continuing operations is now expected to be about $590 million at the midpoint of the narrower range. This is approximately $15 million higher than previously anticipated, driven primarily by accelerated cost savings and performance improvements. Full year adjusted free cash flow is anticipated at $275 million at the midpoint of the tighter range for the year. The profit improvement in continuing operations is expected to be offset by lower profit from discontinued operations. Please turn with me now to Slide 10 for the drivers in sales and profit change for our full year guidance. As with the quarterly walk we showed earlier, our full year guidance walk adjusts 2024 for estimated discontinued operations and walks forward our guidance for continuing operations. Discontinued operations reduced 2024 sales by $2.5 billion, so we begin 2025 at $7.7 billion in sales for continuing operations. Adjusted EBITDA from discontinued operations was $490 million reducing adjusted EBITDA to $395 million, resulting in a 5.1% margin. In this presentation, we have combined the impact of sales from continuing ops in our Off-Highway business into the volume and mix category. We expect volume and mix to lower sales by approximately $600 million, driven by lower demand in traditional Commercial Vehicle markets as well as electric Light Vehicles impacting our battery cooling business. Adjusted EBITDA from volume and mix is expected to be lower by $130 million. Performance is now expected to increase EBITDA by approximately $110 million, mostly through pricing improvements. Cost savings will add $235 million in profit, as mentioned previously. The tariff impact for the full year is expected to add about $150 million to sales, and we now expect it to lower profit by about $20 million. The majority of this profit headwind will be recovered next year. Foreign currency translation is now expected to increase sales by $25 million, primarily due to the strengthening euro compared to the US dollar, offsetting some of the sales impacts of lower volume. Finally, commodity cost recovery should drive about $15 million in higher sales and now only about a $5 million headwind to profit. The net result will be about a 290 basis point margin improvement in continuing operations compared to last year as performance and cost-saving actions overcome market headwinds. Next, I will turn to Slide 11 for the details of our free cash flow guidance. As mentioned, we anticipate full year 2025 adjusted free cash flow to be about $275 million at the midpoint of the guidance range. We expect about $105 million of higher free cash flow from increased adjusted EBITDA. One-time costs will be about $30 million higher as we invest in our cost-saving programs and restructuring. Working capital will be about $105 million lower as we continue to reduce the requirements to operate the business. Capital spending net is expected to be about $325 million this year, which is $45 million lower than last year. Finally, I will return to Bruce for some closing comments on Slide 12.

R. McDonald, Chairman and Executive Officer

Okay. Thanks, Tim. This slide reflects the same as we discussed last quarter, indicating that I believe the business is performing well, and we're delivering on our commitments. The cost savings for the year, or the run rate we’re targeting of $310 million, is solidly on track. As mentioned, we're realizing more of that benefit here in 2025. Regarding our margin outlook, we’ve consistently indicated that we expect margins to reach 10% to 10.5% in 2026. It’s exciting to give guidance here for the fourth quarter that is in that range or slightly above. Overall, our team is doing a great job over-delivering on the areas we can control, which helps us offset the aspects beyond our control. In terms of shareholder capital return, we're committed to the $600 million this year. Finally, I believe our growth story is underappreciated by the market. While we have witnessed some deterioration or backlog due to program cancellations, deferrals, or lower volumes, our team has done an admirable job this year gaining market share and securing incremental programs. We plan to host an analyst call in January to discuss our revised backlog, and we intend to continue winning new business. I hope to add to our backlog between now and January. With that, we’ll turn it over for Q&A.

Operator, Operator

Our first question comes from Tom Narayan with RBC Capital Markets.

Gautam Narayan, Analyst

Yes. My first one, it's kind of an OEM question, but it relates to you guys. The big story from this earnings season was the big policy change, the MSRP exemption or extension that included broadening the scope of parts. You saw that 2 large U.S. OEMs had huge impacts on their tariff guidance and presumably, their volume outlook. Conversely, earlier this morning, a large European OEM reported results. It had no positive impact from that. I was wondering if you were seeing some dynamic where the U.S. OEMs, which you guys have more exposure to, may benefit more from tariff policy changes than perhaps the European or maybe even the Japanese and Korean OEMs. I have a quick follow-up.

R. McDonald, Chairman and Executive Officer

Yes. You're absolutely right. The rebate is based on vehicles assembled in the U.S., and obviously, the big Detroit 3 produce more in the U.S. than the European or other transplant OEMs. I think the most significant aspect of the recent announcement is concerns about whether customers will have to pass along the higher prices they are currently absorbing in their margins to the end customers. If that were to happen, vehicle demand would inevitably drop. That risk has significantly diminished with the new guidelines.

Gautam Narayan, Analyst

Okay. And my quick follow-up; the Commercial Vehicle side, it sounds like from your prepared comments that, that situation is deteriorating. Just curious if you could give us the context of how that cycle typically works and whether you're seeing any kind of light at the end of the tunnel.

R. McDonald, Chairman and Executive Officer

No, we're not seeing any light at the end of the tunnel. If you look at kind of the run rate here in North America during the third quarter, we're running around a 200,000 unit annualized run rate. From discussions with our customers, it’s apparent that their backlogs have really been run down. There is significant uncertainty in the marketplace. We would have expected to see signs of pre-buy in 2026 associated with emissions legislation changes, but we’re not observing any of that. Thus, I believe it’s going to be a soft market at least until mid-2026. Currently, I don’t see any green shoots suggesting a turnaround. However, I also don’t anticipate any further significant deterioration from here either, as we are at historically depressed levels.

Operator, Operator

Our next question comes from the line of Emmanuel Rosner with Wolfe Research.

Emmanuel Rosner, Analyst

My first question is on the implied outlook for the fourth quarter, which, as you pointed out, is quite strong and with margins already slightly above the high end of your margin outlook for next year. Just curious if you can help us understand the sequential drivers. Will there be a 200 basis point margin improvement versus Q3 on what is essentially lower revenue at the midpoint? You flagged a few exogenous events such as forward schedules and potential impact from the fire. Just wondering how to think about the performance quarter-over-quarter into the fourth quarter.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Yes, Emmanuel, this is Tim. A couple of things. Obviously, we expect continued improvement from our cost savings initiative. We anticipate improved mix during the quarter. Additionally, as Bruce mentioned in his opening comments, we are at the tail end of some restructuring actions that had headwinds in the third quarter but that we believe will drive additional performance and better profitability into the fourth quarter. This will provide a solid foundation moving into 2026. We did announce the closure of a battery cooling plant earlier in the quarter, impacting our operational efficiency. We continue to work on improving our cost base across the board, and you will see those improvements reflected in the fourth quarter as well as next year.

Emmanuel Rosner, Analyst

That's helpful. And honing in on the top line and mix dynamics, could you provide more color on what mix you're referencing with respect to improving in the fourth quarter? Any insight into the potential impact on your customers from the Novelis fire? IHS has one view around fourth schedule and Ford's guidance, which has a considerable loss in volume production. Just curious what's embedded in your schedules.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Yes. I don't want to get ahead of our customer, but we are fairly aligned with Ford's public statements regarding their operations. In terms of mix, improvements refer to some product movements as we transition from plant to plant, and we are noticing improved contributions in some areas due to better mixes. A lot of it relates to rationalizing production paths.

R. McDonald, Chairman and Executive Officer

Yes. I want to add that in the third quarter, we faced constraints in magnets. Our facilities in China, India, and Europe experienced challenges. However, those issues appear to have been resolved, and we anticipate a substantial catch-up in frustrated orders, which are of high margin for us.

Operator, Operator

Our next question will come from the line of Edison Yu with Deutsche Bank.

Yan Dong, Analyst

This is Winnie Dong on behalf of Edison. My first question is regarding the $110 million performance. I believe in your prepared remarks, you mentioned it’s primarily driven by pricing increases. I’m curious if there are specific larger programs in place benefiting from this revised pricing, and what other drivers are included numerically.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Absolutely. Part of this increase is due to launching new platforms and programs that come with updated pricing. Additionally, our commercial teams have succeeded in negotiating recoveries, both economically and through enhancements. A significant portion of that number represents pure pricing increases, with approximately $80 million in top line growth, while the balance is derived from productivity and performance improvements at the plant level, net of inflationary impacts.

Yan Dong, Analyst

I appreciate that clarity. Regarding Light Vehicle and Commercial Vehicle, could you provide a higher-level overview of the factors you are considering as you look ahead to 2026?

Timothy Kraus, Senior Vice President and Chief Financial Officer

Absolutely. As Bruce indicated, in terms of the Commercial Vehicle side, we don’t expect significant improvements, especially in North America, at least in the first half. With regards to Light Vehicle, we have numerous programs launching next year that should bolster volume. Our main Light Vehicle programs, specifically on the driveline side, like Super Duty, Bronco, Wrangler, and Ranger, are ongoing strong performers, and we expect those to maintain their momentum into next year. Wrangler will be updated, which should also contribute positively.

R. McDonald, Chairman and Executive Officer

Additionally, with oil prices remaining soft, this presents a tailwind for large SUVs. Although we are currently experiencing a short-term decline in Super Duty, Ford has already indicated its plans to ramp up volume next year, with additional Super Duty production expected at their Oakville facility around August. Overall, our exposure to ICE, particularly with large SUVs, puts us in a favorable position as we enter 2026.

Yan Dong, Analyst

I understand, thank you for the thorough response. I wanted to confirm something I previously mentioned, you do not anticipate much impact in Q4 from one of your larger customers. Is that due to conservative original guidance or because they are not passing on that impact to you?

Timothy Kraus, Senior Vice President and Chief Financial Officer

It’s a bit of both. So we included some of this in our forecast back in August, and the customer's perspective is that they expect to mitigate some of the losses as we progress through the latter part of the quarter.

R. McDonald, Chairman and Executive Officer

Keep in mind, our exposure is primarily related to Super Duty, not F-150. So when volumes are reported, they typically include both, meaning that profitability for Super Duty is prioritized to maintain strength.

Operator, Operator

Our next question comes from the line of James Picariello with BNP Paribas.

James Picariello, Analyst

As we contemplate next year, is it possible at this stage to quantify the next segment of cost savings beyond the $310 million program with respect to plant closures, which you referenced in your prepared comments, and overall, just enhanced execution?

R. McDonald, Chairman and Executive Officer

That is a good question. In terms of opportunities to expand our margins, we have substantial room for improvement beyond the current $310 million. This figure emphasizes quick implementations without needing substantial investment. Looking at that segment, we believe there’s potential for another $50 million to $75 million that we can secure over the next few years. Beyond that, there are opportunities related to our plant footprint as discussed earlier, and we've announced one closure this month. Given the investments we’ve undertaken in electric vehicles, these have diverted some resources from standard operations. If you evaluate our plants' automation levels, they currently lag behind other well-capitalized suppliers. We've also identified numerous products where returns are inadequate, and we're addressing these. Lastly, I anticipate ongoing refinement of our cost base in the EV segment, eventually transitioning this aspect from a drag on our margins to accretive, expected within the next 6 to 12 months. Overall, there are numerous levers we can pull, and I do not see 10% or 10.5% as a high watermark but rather a starting point for continued growth in the next couple of years.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Regarding CapEx as a percentage of sales for next year, we anticipate it to remain around 4%. Stranded costs should be approximately $30 million to $40 million, and we expect to eliminate a significant portion after completing the transaction and during 2026. Some costs will persist due to transitional services, but these will be counterbalanced by payments from Allison. As for CapEx, next year will likely see a significant increase in automation spending.

R. McDonald, Chairman and Executive Officer

To clarify, while we will redeploy some of the dollars we've allocated to EV towards efficiency improvements in our traditional ICE plants, we will also be strategically investing in automation, targeting basic efficiency improvements on the plant floor such as unloading/loading machines, AGVs for movement, etc. We are significantly behind the automotive standard in this regard, which represents a valuable opportunity for us.

Operator, Operator

Our next question will come from the line of Joe Spak with UBS.

Joseph Spak, Analyst

I wanted to follow up on the last point. There’s significant opportunity ahead that requires investment. Should we expect some of that investment to commence next year? How quickly can savings materialize following that investment?

R. McDonald, Chairman and Executive Officer

Yes, we will. We've been investing significantly in EV over recent years; now we plan to shift some of those funds towards other operational areas. We intend to improve the efficiency of our core operations, targeting tangible benefits within a shorter payback period.

Timothy Kraus, Senior Vice President and Chief Financial Officer

At the same time, we're maintaining our 4% free cash flow target.

Joseph Spak, Analyst

So would you categorize some of that spending as redeployment with some being incremental?

Timothy Kraus, Senior Vice President and Chief Financial Officer

Yes, that is accurate. We currently spent less than that, but we believe we will generate incremental profitability that we can reinvest to enhance margin growth over the next few years.

R. McDonald, Chairman and Executive Officer

A quick note regarding the EV charges this quarter; we booked some additional costs from EV programs which were canceled during the quarter encompassing several OEMs. The total is roughly $10 million, which isn’t massive. We are, however, in negotiations with the customer regarding recovering these amounts, which we anticipate collecting in the fourth quarter.

Timothy Kraus, Senior Vice President and Chief Financial Officer

This charge was included in our adjusted EBITDA number.

Operator, Operator

Our next question will come from the line of Ryan Brinkman with JPMorgan.

Ryan Brinkman, Analyst

Given the discussions on your margin improvement and cash flow targets beyond the 10% to 10.5% and 4% of sales target by 2026, I don’t think it’s premature to discuss the roadmap. I’d like to gauge your confidence level for next year’s performance and whether you view additional execution as necessary to achieve the targets.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Assuming end markets hold up, Bruce and I have great confidence in our ability to deliver the expected results for next year. Our performance in the fourth quarter serves as an encouraging indicator. While we see potential for further upside, we are mainly focused on closing out 2025 and executing on delivering the $310 million target, setting ourselves up for next year. If consensus estimates are below our projections, it indeed frustrates us, as we’ve communicated our outlook for some time.

R. McDonald, Chairman and Executive Officer

Right. From my perspective, we committed a year ago to reach 10% to 10.5% margins. Our consensus estimates have gradually risen, correlating with our strong stock buyback due to our confidence in our projected numbers. In fact, we believe our stock is undervalued at this point.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Indeed, the stock appears to be on sale right now.

Ryan Brinkman, Analyst

Shifting to the end markets, while you noted that others have indicated significant headwinds in commercial vehicles, I wonder if your position relative to others, perhaps considering factors like Class 5 through 7 to Class 8, places you in a different context. I recognize you are observing these patterns together with those mentioned in the softening market. Could you elaborate on how this contrasts with your competitors?

Timothy Kraus, Senior Vice President and Chief Financial Officer

While we have aftermarket exposure, I believe most competitors share similar characteristics. The fleets are aging, which is a key consideration. Presently, we think the current run rate is low. We have built a more conservative forecast, hence our conservative stance. For 2025, we don’t anticipate substantial expansion in the first half but believe it won't decrease much further from current levels.

R. McDonald, Chairman and Executive Officer

Regarding our commercial vehicle segment, we have actually gained market share. Our team has successfully worked on spending up our share with our Big 3 customers in North America, providing a cost-competitive model that offsets some market deterioration.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Indeed, over the past 12 months, we have seen significant increases in share with some customers and anticipate further gains.

Operator, Operator

Our final question will come from the line of Dan Levy with Barclays.

Unknown Analyst, Analyst

Josh on for Dan today. I’m attempting to understand how to transition from the 4Q margin to 2026. I know the slides outline the major margin drivers. I’m exploring if there’s anything unusual in Q4 that might preclude a significant step-up in margin next year.

Timothy Kraus, Senior Vice President and Chief Financial Officer

No, those basis points are related to our total 2025 continuing operations financials and do not reference the fourth quarter. We believe the fourth quarter will align with our predicted full year average as we transition to 10% to 10.5% margins.

Unknown Analyst, Analyst

So we should assume that a significant portion of those drivers are already integrated into the 4Q margin?

Timothy Kraus, Senior Vice President and Chief Financial Officer

Yes, exactly. The cost savings we anticipate will offer an additional boost as we aim for a run rate of $235 million in the fourth quarter, and will contribute to the expected margin increase as well.

Unknown Analyst, Analyst

Additionally, I recall you mentioning that your core platform volumes are stable in the upcoming year. Some of your customers referenced that regulatory changes could affect certain platforms. I want to confirm whether there is expected improvement in performance trends related to the off-road operations.

Timothy Kraus, Senior Vice President and Chief Financial Officer

Yes, we've observed a richer mix with larger axles creating solid opportunities. Specifically, if Wrangler's mix skews towards the Rubicon, that will translate into superior results for us. The same goes for Bronco. We've also touched on Ford's plans to enhance Super Duty capacity, which contributes positively.

Operator, Operator

This will conclude today's call. Thank you all for joining. You may now disconnect.