Phinia Inc. (PHIN) Q2 2026 Earnings Call Transcript

Good morning and welcome everyone to the FANIA Second Quarter 2026 Earnings Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Brady Erickson, Vice President and Treasurer. Please go ahead.

Thank you. Good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on Phineas Investor Relations website, including a slide deck that we'll be referencing in our remarks. We're also broadcasting this call via webcast. Joining us today are Brady Erickson, CEO, and Chris Grot, CFO. During this call, we will make forward-looking statements, including comments related to our 2026 guidance, which are based on management's current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filings. We caution listeners not to place undue reliance upon any such forward-looking statements. And with that, it's my pleasure to turn the call over to Brady.

Thank you, Gordon, and thank you, everyone, for joining us this morning. I'll start with some highlights on the second quarter and some key developments in the quarter that support our strategy. Chris will then provide additional details on our second quarter results and discuss our 2026 financial outlook. We will then open up the call for questions. The second quarter developed largely as to be expected with highlights including continued revenue growth from both fuel systems and app market leading us to a refinement of our full year guidance. We were also excited to announce that the company has entered into a definitive agreement to acquire the STOVA Group, a global technology partner specialized in high precision components, systems, and integrated solutions globally. As slide six and seven detail, STOVA has operations in four countries, expected run rate third-party revenue of approximately $80 million, and a creative EBITDA of approximately $25 million. We expect the integration of the STOVA group to expand our exposure in off-highway, industrial, and other customers and markets, and drive synergistic profit expansion through supply chain ownership integration of key capabilities and cost efficiencies this will also add an additional aerospace and defense qualified location or portfolio as well as greater exposure to these customers excitingly these assets support the global semiconductor industry with high performance equipment components opening another avenue of growth and diversification closing of the deal is expected in the fourth quarter of 2026 and will be funded with available liquidity returning capital to shareholders is a key component of our capital allocation strategy and with a healthy balance sheet we continue paying dividends and repurchasing shares we are confident of our operational and financial performance that allows us ongoing run rate capital returns to our shareholders While the environment continues to evolve rapidly, our teams are managing our business well and delivered results that strengthen our long-term foundation. Our diversification across regions, customers, and markets and products helped offset variability in any single region or segment. And finally, we continue to adapt to ongoing changes in government policy governing tariffs. and as such, booked expected net refunds during the quarter with some cash settlements already received. Chris will discuss further details in her commentary. Turning to slide eight, PINIA continued to demonstrate resilience in a mixed macroeconomic environment. Demand conditions across key end markets remain steady, supported by durable replacement cycle fundamentals and ongoing positive results in the commercial vehicle industry. We continued to navigate ongoing geopolitical and trade-related uncertainty, tariff changes, as previously noted, shipping challenges, and regional production variability. Through strong operational execution and disciplined cost management, we've managed these challenges effectively. We continued our streak of year-over-year growth in both aftermarket and fuel system segments. Total net sales in the quarter were $940 million, up 5.6% from the same period of the prior year. Excluding FX impacts, the impact of tariff recoveries, and the contribution of SEM, revenue was up 2%. We've reported adjusted EBITDA of $130 million for the quarter, up $4 million, representing a margin of 13.8%. Total segment adjusted operating income was $125 million, or 13.3% margin. The fuel system segment delivered a strong quarter with sales of $584 million, up 5%, and adjusted operating margin of 11%. The aftermarket segment had sales of $356 million, up 6.6%, with adjusted operating margin of 17.1%. Adjusted earnings for diluted share, excluding non-operating items, was $1.53 for the quarter, compared with $1.27 in the same period of the prior year, a 20.5% increase year-over-year. From a balance sheet perspective, FINIA continues to demonstrate financial stability and consistency. We exited the quarter with a cash position of $370 million and a total liquidity of $820 million. Our net leverage ratio is 1.3 times, which is under our target of 1.5. We've returned $53 million to shareholders in the form of share repurchases and dividends. Our balance sheet continues to provide the financial flexibility to support growth initiatives while returning capital to shareholders. In summary, while the external environment continues to evolve, we remain focused on the current and future of the business. the second quarter performance underscored the durability and resilience of our business amid a rapidly changing global environment by serving a broad mix of regions customers and markets and products moving to slide nine i am pleased with the success we are having with respect to gaining new business the second quarter was another good quarter for us reflecting continued progress across multiple fronts importantly we're continuing to grow with our existing customers adding new ones and gaining real traction in new areas of our portfolio this quarter included notable wins across oe and aftermarket channels reinforcing customer trust technology differentiation and finia's ability to deliver premium solutions to our customers launch progress on important programs in our portfolio include aerospace off highway heavy duty truck continued at an advanced pace which will support our progress through the end of the decade and beyond. Key fuel system wins in the quarter include a new business for a heated tip MPFI system supporting light passenger vehicle engine application, further expanding Phineas alternative fuel portfolio, a 24 volt starter program supporting a class 8 commercial vehicle platform, reinforcing Phineas' long-standing position in the heavy-duty on-highway market. A complete common rail system program for agricultural applications highlighted the strength of Phineas' integrated fuel system portfolio in reinforcing our position in the growing off-highway sector. Turn to slide 10. Our aftermarket business continues to be a steady and reliable contributor to our results. Demand remains consistent, driven by an aging fleet and a growing vehicle park. As vehicles stay on the road longer, customers around the world rely on our quality parts and service more than ever. Our strong and recognizable brands, broad and consistently expanding product offerings, and focus on customer service are helping us build deeper relationships and win new opportunities. Recent wins were across diverse geographies, further strengthening our position in the independent aftermarket. A few notable changes during the quarter include open vehicle electronic distribution with a leading pan-European distributor, significantly expanding market access across the EMEA region, expanded the global aftermarket footprint through new customer acquisitions, branch expansion, and increased distribution penetration across North Africa, Eastern Europe, North and South America, China, Southeast Asia, and Oceania. We introduced more than 2,650 new SKUs globally during the first half of 2026, while adding more than 150,000 cross-references to regional catalogs, expanding vehicle coverage, and enhancing customer access to Finia products. These wins show consistent progress towards seamlessly diversifying into higher growth end markets by leveraging our existing human and manufacturing capital. Additionally, we had several significant product launches this quarter, including a 500-bar GDI system, showcasing our full system capabilities and continued leadership in advanced gasoline technologies, a fuel delivery module in india broadening our cv portfolio and supporting growth in a key strategic market and a next generation gdi pump reinforcing our position in passenger and light commercial vehicle applications moving next to capital allocation on slide 12 our approach remains unchanged we are staying disciplined and balanced and are continuing to invest in our business to support long-term growth both organically and through strategic opportunities that strengthen our competitive position and expand our long-term opportunities. At the same time, we are committed to maintaining a healthy balance sheet and returning cash to shareholders through dividends and share buybacks which do not slow down despite striking the deal for this Dovo acquisition. This approach reflects our strong financial position, our confidence in the path ahead, and our focus on long-term value creation. During the quarter, we returned 53 million to shareholders in the form of dividends and repurchases. 216 million remains under our current share repurchase authorization. Since the spinoff in July 2023 through the second quarter this year, we have repurchased 534 million worth of shares, representing approximately 24% of our original share count, and paid $131 million in dividends. In total, we have returned $665 million to shareholders through share buybacks and dividends since July 2023. We have achieved all of this while keeping net leverage below our target, reserving strong liquidity, and continuing to fund the growth of our business finally i want to thank and congratulate all of our employees as we just surpassed our third anniversary as an independent publicly traded company it's been a great journey so far and look forward to many more years to come i'll now turn the call over to chris to discuss our financial results in more detail and discuss our 2026 outlook thanks brady and thanks to all of you for joining us this morning.

As a reminder, reconciliations of all non-GAAP financial measures that I will discuss can be found in today's press release and in the presentation, both of which are on our website. In the second quarter, we delivered results in line with our expectations, and that reflect both the strength of our diversified portfolio and the benefits of our operational discipline. Diving into the details, which you can find on slides 13 and 14 of the presentation, I will bridge our revenue and adjust to EBITDA for the second quarter. Specifically, during the quarter, we generated $940 million in net sales, an increase of 5.6% versus a year ago. Compared to Q2 2025, our top line rose 2.4%, unfavorable for an exchange of $21 million, as the Chinese Renembi, Euro, and Brazilian Real strengthened against the U.S. dollar. We saw a positive contribution from volume and mix of $18 million, or 2%, on positive customer pricing and higher sales in the America's aftermarket. Revenue in the quarter was reduced from net tariff pass-through of $7 million, affected mainly by anticipated tariff refunds from the government expected to be passed through to customers, who had previously reimbursed us for portions of the impact. Finally, SEM contributed sales of $18 million in the quarter. Excluding the FX impact, SEM contribution, and tariff pass-throughs, sales were up 2% in the quarter, moving next to the bridge on slide 14. Adjusted EBITDA was $130 million in the quarter, with a margin of 13.8%, representing a year-over-year increase of $4 million and a 40 basis point decrease in margin. Net tariff expense and anticipated refunds were an $11 million contribution to earnings in the quarter. Contribution from SEM was $3 million, or a 16.6% margin in the quarter. Product mix, partially offset by supplier savings and cost control measures, was a $1 million headwind. Other costs, including corporate costs, were up approximately $9 million, primarily due to adjustments for short- and long-term incentive compensation. All changes are related to previously published incentive compensation schemes for Phineas Associates, which reward improvements in economic value and the cash generation of the business. We continue to effectively execute our disciplined capital allocation strategy, successfully balancing significant cash return to shareholders with the potential for strategic, accretive m a cash and cash equivalents at quarter end were 370 million while available capacity under our credit facilities was approximately 450 million dollars for a resulting liquidity of 820 million cash flow from operations was 91 million an increase of 34 million over second quarter 2025 Adjusted free cash flow with $74 million, with capital expenditures of 2.3% coming in below our target of 4%, and efficient uses of working capital in the quarter, including approximately $1 million in cash tariff refunds received. Share repurchases and dividends represented our primary use of capital, with value back to our shareholders of $42 million and $11 million, respectively, in the quarter for year-to-date totals of $98 million and $22 million, respectively. As Brady noted, we announced the purchase of STOBA Group in late June with an expected close date of Q4-2026, dependent upon normal regulatory approvals and customary closing conditions. With a purchase price of approximately six times EBITDA, we expect the inclusion of the business to be secretive on a run rate EBITDA basis, adding approximately 40 basis points on an annual basis. While full Stowbrook Group's sales were approximately $200 million, this balance includes sales to FINIA operations, which upon consolidation are eliminated as intercompany sales. On a third-party basis, this asset will add full-year sales of approximately $80 million and $25 million, or 31%, in adjusted EBITDA. We are excited to welcome the group into the FENIA family, strengthening capabilities, expertise, and future growth opportunities in multiple markets and product lines. We continue to generate strong free cash flow, supporting our near- and long-term capital allocation priorities. Our broadening portfolio of products, solutions, and services coupled with our healthy balance sheet will enable us to continue to deploy capital with discipline, focused on delivering long-term sustainable profitable growth creating value for our shareholders moving next to slide 15 to comment on our 2026 outlook as we move through the year we're refining the full year guidance we issued earlier this year specifically we're tightening the range of revenue while keeping the midpoint of our revenue outlook range at 3.57 to 3.67 billion we would expect an increase in net sales in the mid-single-digit range, inclusive of FX. Excluding expected FX, our growth is projected to be in the low single-digit area. We are now guiding adjusted EBITDA to be $485 to $515 million, with an EBITDA margin of 13.5% to 14.1% as sales impacts from FX and net tariff recoveries, as well as product mix, have had a slightly dilutive impact on margins. We believe the business is well-positioned to continue generating meaningful free cash flow, and we've updated our 2026 outlook for adjusted free cash flow to $210 to $250 million. We expect the adjusted tax rate to be in the 30% to 33% range, as meaningful progress has been made in addressing legacy tax structure headwinds. Overall, we expect to continue to deliver strong results in 2026, as we drive operational efficiencies and search for new areas of growth for both segments. As a reminder, our outlook does not account for potential impacts from changes related to the announced STOVA acquisition. In addition to recent or future government policy changes or other risks described in our filings with the SEC that could influence our operations or technical centers. This includes measures such as additional tariffs, tax reforms, or any other policies that might either increase or decrease our revenue assumptions and or alter our cost structure. With that said, we believe FINIA is well-positioned to navigate global market conditions and changes, and we are confident in our operations and our ability to generate sufficient cash for our needs while also continuing to invest in the future. As we look forward to the rest of the year, we look forward to managing the business as demand, risks, and opportunities develop while providing solid returns to our shareholders. We want to thank you all for joining us on this call today, and we are ready to open up the call to questions. Operator, please open the lines.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. We'll go to our first question from Christian Zyla at KeyBank Capital Markets.

Good morning, everyone. Thank you for taking the questions. First question for me is just on the guide lower amid what seems like a positive backdrop. So LPV might be better than expected on higher volumes and or mix. Commercial vehicle orders in the last three months have been positive. The industrial backdrop on IP and PMI is positive. So just can you kind of frame out like how much of the guide down, you know, kind of as we think about 2026 and then even into 27, And, like, how much is that positive backdrop weighing, like, the guy down? I'm just trying to kind of square those two.

Yeah, I mean, from a revenue standpoint, we kept it flat. And so really no change. We were always expecting the back half of the year to be a little bit stronger than the first half. CV, as you mentioned, is looking a little more positive. I think light vehicle globally is a little bit weaker. Seeing some weakness in China light vehicle market. I think you see that local market down in the mid-teens, so seeing some challenges there. But all in all, we kept our overall revenue flat, our guide flat.

Let me add one area, Christian. The tariff refunds that we're getting, there's a big chunk of those. In fact, about half of what we booked will go back to customers. That's a reduction in sales. So that's about a 7 million hit on the revenue. It's not extremely material, but that is also an effect that we did not have at the beginning of the year.

Got it. Thank you. And then for my follow-up, if I could just ask about STOBA. So is the right way to think about the incorporation of the business, like 80 million in sales and, I don't know, 10 million in EBITDA?

Or is there something special to think about in terms of the EBITDA dollars that you get from the deal? no we you have the right the 80 million of the revenue the 25 million is the ebitda and it's just the because again we've got 120 million of revenue that was from uh still but to finia and when it gets eliminated as intercompany but we still have the profit from it um and so the right way to look at it is 80 million of additional revenue 25 million of EBITDA and that's why Chris kind of highlighted that given that it's actually going to be EBITDA margin accreted by you know close to 40 basis points got it that makes sense thank you nice

little acquisition there thanks we'll move next to Jake Scholl at BMP Paribus hey guys uh can you provide a little bit more detail on um what drove your decision to acquire SOBA and then how should we think about potential synergy-driven upside to that $25 million in EBITDA? Thank you.

Yeah, I mean, Stova has some really unique operational capabilities in manufacturing. They were obviously a key supplier to us. We've known them for a long time, and this is also part of our kind of just making sure we have a stronger supply base and we're protecting our customers. they were obviously a small organization only 200 million of sales roughly and we thought this kind of made sense to solidify our own manufacturing capabilities as well as opening up you know additional customers for us and so one of their sites is aerospace and defense certified so that's going to open up you know some additional customers there they have customers that we currently don't support so that's going to be an interesting opportunity there um and then finally i think you know as far as synergy the the 80 million and the 25 is what we expect them to be um you know relatively quickly um as as with the sem that also includes some dis energy to bring them kind of up to speed to our you know capabilities and systems and processes and controls. And so that kind of considers some of the synergy as well as the dis-energy. I think longer term, we see opportunities for higher growth. And again, from our standpoint, it solidifies our supply base and our manufacturing, supports our customers, expands our off-highway and industrial and other kind of exposure and markets at a fair valuation. um and we think they're you know longer term there may be some synergies uh that we'll be able to get from them as well so um we thought it was you know a a nice acquisition a nice tuck in for it thanks brady and then uh could you guys just uh help us understand the bridge to uh 10 million dollars in higher free cash this year and then um you know as we look at stoba's customized

machinery business it looks like they provide or they could provide a lot of the uh precision and laser machining um you know uh equipment uh that you guys use uh so does stoba make up a material portion of your capex and is there potentially an outsized uh free cash impact from deal thank you no i think they they can help us on the equipment side uh they do some their own machine building and that's what some of their capabilities are and that's some of the equipment that we need as well so there's some additional synergies there um i think you see from the from the cash side i think that it continues to be a real positive story i think

you see our our working capital as a percent of our revenues kind of continue to be um you know improved uh the team is doing a good job managing that working capital uh cash tax rate continues to come down a little bit. And again, that's, you know, CapEx coming in, you know, a little bit lighter, that's helping our cash flow as well. So there's a lot of little different things that are going into it. But I think in general, from our, as Chris mentioned, from the employee costs and the short-term incentives for the employees, you know, economic value is around, you know, being more efficient. And that's driving the teams to really drive operating investment down, you know, questioning some of the capex and the investments, ensuring we keep our working capital down. And with the increased, you know, profitability of the business, they're doing a nice job there. And with that, you know, improved working capital and being more efficient, that drives additional cash flow as well. And so that's why we've increased that. If you see our first half of the year so far, you know, we're at over 100 million. So I think we're a large chunk ahead of where we were, close to $80 million, I think above where we were through the first half of the year. So the team's doing a really nice job there. I do think we have some timing benefits that got pulled into Q2 that's giving us some benefits. But I think the team's really focused on generating strong cash. And that's allowed us to continue to return money to shareholders and support an acquisition at the same time.

And as a reminder, if you would like to ask a question, please press star one. We'll go next to Joe Sack at UBS.

Hey, Brady and Chris. Good morning. How are you?

Good morning.

Doing well, ourselves. Maybe just a couple of clarification points. So first on STOBA, is the right way to think about this, like, you know, because I know you're saying it's margin-attreative, but you know um when it was standalone it was like 12 and a half percent margins is the right way to think about this it's like you know 10 million of ebit to external and then like 15 million dollars of vertical integration savings yeah that's probably a fair way to say it so that's how you get to being sort of margin accretive because i'm because like because you're you're basically you're saying right the sales don't count but then you get some vertical integration savings right yes okay okay thanks for that and then the tariff recovery that helped by 11 million in the quarter was there always an expectation in your outlook of a tariff recovery and I guess similarly like the employee compensation you're mentioning was that also what was previously baked into to the outlook uh and then and maybe is there any more of either left in the back half all right i'll start i don't think you're ready or you want to go i'll get

started and then you can fill in um if i can now remember the questions um let me go back the the tariffs that we're recovering these are the iepah the majority of it this quarter was the iepah and And no, that was not in guide because it was quite unclear, obviously, until the Supreme Court decision. So it wasn't until, you know, some people started the GM4 and started booking some at the end of Q1. For us, it wasn't clear until we started doing the filings with customs and what was going to be coming back in. then we actually started getting cash in. Once all of the what they call CAPE 1, 2, and 3 were put in and accepted, then working, you know, we felt confident. It's estimable. It's probable. We know we're going to get those in. And we also know how much we will then have to refund to our customers who funded those upfront. So no, that was not anticipated in the original guide. And on the then the bonuses yes we did have a lot of that baked in but there's there's one item there's the stock comp and it's not massive but about two million dollars in the first half of the year on our stock comp which because our stock price is higher we needed to revalue that and bump it up the rest of it is on bonuses um we are bumping those up we had target bonuses in our original guide and our expectations. However, because the teams have really been working on working capital and cash flow, which are big components of our overall EV economic value models and their merits and what they have to achieve, that we've had to bump that up. So it's not going to be over and We will be booking additional in the back half of the year, but not materially more than we have in this half of the year, unless we have even higher increases.

Okay, so maybe just to summarize then, if we think about, you know, your full year guidance, the good guy relative to prior is the tariff, which wasn't in there, but that's at least partially offset. or I guess maybe more than offset by those higher compensation costs? Those are the two changes, or are we missing any other factors?

Those are the material ones. So, yes, going into the back half, we will not have additional IEFA.

However, in the back half, we do have additional global supply chain savings and other productivity improvements that will offset any additional bonuses. okay so maybe that answers my my last question which was like if we if we back out the tariff gain the 11 million in the quarter then it does seem like margins step up about 100 basis points half over half on flat sales but it's driven by what you just mentioned which is the productivity yes yes thank you we'll take our next question from bobby brooks at northland capital markets

Hey, good morning guys. Thank you for taking my question. I thought something that was very meaningful from Stova acquisition is that it has an A&D qualified location and so was curious to hear more on that. Does it already have the right type of capital equipment installed there to fulfill your current programs that you're on? Where is this new location and how much SLAC capacity is available there?

Yeah, from their A&D location, Yeah, we're excited about that one, too. That gives us the second one that's actually in Germany. As we kind of highlighted, there's seven manufacturing sites in the U.K., China, Czech Republic, and Germany. The bulk of those are in Germany, close to their customers, which we think is, you know, good as well. Because I think with the increased investment in A&E and Europe, I think being in France and Germany is going to be one of the requirements. um we think they have you know plenty of capacity so all of it's already kind of installed um obviously they do a lot of detailed machining as you see from one of the pictures there uh you know it's a very advanced process um but we think we're going to be able to to utilize some of their uh excess capacity as well to kind of help help our global business as well so um So we're not concerned about having, you know, significant additional capital to meet those needs, and we think they're in a really good spot for us. You know, some of those customers, you know, the Liebers, even the Zeises, the ZFs, the Dysons, there's a lot of different customers out there that are going to be new for us that's going to, you know, allow us to open up, you know, additional opportunities with them. um so we're we're kind of really excited about that opportunity as well that get everything yeah those those very helpful thank you brady and i guess just kind of double clicking on that um of the 80 million that were third-party sales for stova uh just curious to hear how much of that like the split of of off highway industrial aerospace or or other other similar companies to yourself uh just curious to get a sense there yeah i mean we're not we don't have the exact details that we're going to share but again it's going to increase our percentage of off highway industrial and other as a percent of revenues uh there is a decent chunk with um with some of our competitors and or peers um and so there's a little bit of risk there but not one that we're overly concerned with we want to continue to support them um and we'll firewall off that to protect their ip um but we see it as a as a nice opportunity and again those customers that is

highlighted are are new for us and our group and and we think it's going to be exciting to continue to grow with them but it should help us in our in our focus of expanding you know our our commercial vehicle uh off highway industrial and other as a percent of our revenues got it and i apologize this kind of already touched on this but like the 23 gross margins you posted in the second quarter those those were a record for the company since going public um and i i believe some of that there there is some benefit baked in there from the tariff recoveries and I know it's like 11 million

was the benefit in the quarter but uh just was curious like how much of that helped drive those record gross margins and and it seems like volume was a benefit but so just curious to hear if you could touch on any other factors that led to the strength there because I thought that was a meaningful number yeah i mean you just saw from both the fuel systems in the aftermarket you know operating income was was really strong um i think the the sgna and some other items were all the employees was more of the headwind um from a gross margin again i think they're they're doing well i guess chris if you want to answer that one as far as the flow through of the net tariffs because it affect our sales as well.

Yeah, and Bobby hit it, but on the tariff, so the IEFA portion of the tariffs was 7 million benefits, and then the rest would be just the other, the normal tariff pass through that we're getting, benefit that we get, as we've been doing for the last number of quarters. But then the other, I mean, material is SEM certainly contributed.

They weren't in there last year and they came in at just short of 17 percent ali in the quarter so that was another positive that you would have to add in that's the benefit and will be an ongoing benefit obviously got it and then just last one for me obviously shareholder returns have been the key story for for you guys and have been robust but should folks expect buybacks might subside a bit with pending stoba closing or just any color on your thoughts there i mean as i highlighted in the in the script as well as we don't see this as affecting our our capital allocation strategy

i think we're still at one one three i think is what we ended the quarter at uh the stoba acquisition is going to add additional ebitda as well um so that's going to help us from uh from a uh an even dot perspective on a run rate basis um and so we we still think that if if we see a good opportunistic shares to repurchase we'll continue to do that so there's nothing that's going to materially change how we've been acting understood appreciate the color and congrats on the next quarter all right thank you well we'll go to a follow-up from christian zyla at keybank

capital markets.

Thank you for letting me get on with the follow-up. Just one question kind of generally, I guess, how long were you guys courting Stoba? Like, was this part of the pipeline or did this kind of recently come into your lap?

And then just as we think about, you know, SEM and Stoba, more of these like tuck-in companies, is your pipeline, does your pipeline have more of these little tuck-ins or with the first two, should we kind of expect a little bit of a lull in, you know, future deals and activity thank you no i think we've got uh you know we've been talking with stoba for a while uh about this um again with any acquisition i'd say most acquisitions will will take probably close to a year from initial conversations to you know getting an alignment on on on agreeing on uh you know a path forward then agreeing on a price and then going through you know a due diligence process and so um i'd say all acquisitions there's nothing that's going to be um you know falling in the lap that's going to happen really real quickly uh as far as the pipeline is concerned there's still a very robust pipeline um and again i think we continue to pursue options our our uh kind of m a team is extremely busy uh vetting a lot of different options. There's still a strong pipeline. It's always just ensuring that it meets our criteria as far as enhancing our commercial vehicle and off-highway business, industrial, other aftermarket type areas. And it's at a price that makes sense. And so from our standpoint, we still have a a large pipeline of companies out there. Some of them we continue to have discussions with. Other ones we have on the monitor list saying, hey, let's wait for that right time or when they're ready. You know, we'll be ready. So I guess it's still pretty active. I don't see any lull in the activity in our group.

And with that, that concludes our Q&A session. I will now turn the conference back over to Brady for closing remarks.

Great. Thanks, everyone. and thanks for the great questions. You know, we feel we delivered a really strong start to the year, reflecting the benefits of our diversified portfolio, our discipline execution, and the strength of the markets we serve. I want to thank our teams around the world for their continued commitment and execution. We began the year with solid results, remained focused on delivering consistent growth, expanding profitability, and building a stronger finance for the long term. Thank you for joining us this morning, and have a nice day.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.