Conference Transcript - PHIN 2026-06-10

Speaker 3

I kick off the next session, post-long session, so hopefully everyone's still awake with Finnea. Today we're pleased to be joined by CEO Brady Erickson and CFO Chris Grupp. Finnea is a global leader in fuel systems, notably direct injection systems, but more importantly, they're very diversified. Less than half of their sales are light vehicle, with the majority coming from commercial truck and aftermarket. The stock has also been a very strong performer, up 80% just in the last year, or at least the last time you were here at our conference last year. So maybe just to kick it off with some of the numbers, you're guiding to sales up one to 7%. Why the large range? Is that driven by some of the uncertainty in some of those commercial truck markets?

Brady Ericson, CEO

No, I mean, it's more of, it's plus or minus 100 million on 3.6 billion. So you're plus or minus 3%. That not only includes organic, you know, revenues, changes, but a little bit of FX and tariffs. And so we kind of gave ourselves a little bit of range because it's been a little bit volatile the last couple of years. So we thought it was prudent to have a little bit larger range.

Speaker 3

Got it. And then if I look at the Q1 margins, EBITDA was 13.1. It's a bit below the midpoint of the full year, I think 13.7 of 14.3. You know, what was driving the weak Q1 start and how should you think about the rest of the year from here?

Brady Ericson, CEO

Yeah, I mean, I think in general, last year was probably the normal cadence that we'll see throughout the year, Q1 generally being the lightest from a margin and revenue standpoint. Q2 and Q3 are stronger and then a little bit lighter in Q4. Last year, Q1 was 12.9. I think we ended up at 13.7 for the full year. This year, Q1 was 13.1, so a little bit better. So we're still confident in kind of the second half or the second three quarters of the year.

Speaker 3

Can I take the midpoint of your guidance? It's like a 20% conversion. That seems pretty normal, but we've seen some raw material costs and other issues. Are there any other major puts and takes? Is raw material just going to be completely recovered?

Chris Gropp, CFO

The raw material is not really hitting us. I looked at it a couple of days ago against forecasts. And even if I took all the risks that we see and blew it in, it would be less than 1% of our total material costs. And we more than offset that with cost reductions. So our commodity hits are very minimal, mainly because we get 100% pass through and automated on the majority of them. So for us, it's not a big, big thing. because we're doing you know precision part so the actual commodity content of those is quite minimal overall 1% of material cost of total material cost is the increase would be the increase if all of the risks came through but yeah

Speaker 3

it is very small yeah overall okay what are your biggest raw materials to steal

Chris Gropp, CFO

I guess or aluminum copper some resin overall but yeah it's it's really poly I can't say it some of the resin type materials yeah okay I think you had a

Speaker 3

big investor day in February growth you targeted two to four percent through 2030 that's above them I'm pretty sure all the markets you're in like you commercial and aftermarket and you know a lot of your light products are Toronto combustion engine driven not so that that's also an additional drag what is driving all of that sort of outgrowth relative to your markets through 2030

Brady Ericson, CEO

what do you mean for a couple things one is we're definitely on the light passenger vehicle and like commercial we continue to see share gains a lot of the smaller players were exiting combustion whether and that's opened up opportunities customers are also looking to to diversify over some of the major players like Bosch and Denzel and so we've been going from the low low low teens to the mid teens and continue to see that kind of growing through the decade unlike passenger like commercial commercial vehicle does market share load market share we see the medium duty heavy duty on highway business being relatively consistent see a little bit of growth there we see some content increases as well with the new emissions regulations more advanced technology a little bit of share as well there so we see them over the decade being in that two to four percent aftermarket we actually see it three to six uh you know through the decade one to two percent price one to two percent market one to two percent is you know again expanding our portfolio and gaining a little bit of share uh they've been probably in the five percent range for so far this decade so they've been performing well and the last one the off-highway industrial another which includes ag construction aerospace and defense you know has been close to you know double digit and uh you know and that's why we broke it out in in our investor day because it finally got to a point that it was a significant percentage of our revenues that it made sense to call out and so it went from four percent of our revenues in 2024 to six percent of our revenues in 2025 that was the off-highway industrial and other okay which includes ad construction a and d so that's you know it's a it's an area that hasn't been a huge focus and legacy i guess prior to our prior owners and it's an area that we've been focused on in the last three four or five years

Speaker 3

and we're starting to see that really kick in is it a different competitor set there or is it the

Brady Ericson, CEO

same a little bit different competitor set but still the main competitors in that space uh we may start getting into some of them and go into larger engines you may see like the woodwards of the world you know come in that space as well but as the emissions regulations get tighter and tighter it's going to go back towards direct injection and there's really those three main competitors on those smaller engines and bosch denso and ourselves and a really good example of that is us taking our gasoline direct injection our GDI lines and product and converting it to diesel for off-highway applications for Kohler for their Kohler gensets and so a lot of that old technology the gensets the emissions regulations aren't that significant you know they were doing indirect injection low technology and they're saying hey we need to get better but they can't go from say you know a couple hundred bar to two thousand bar because the cost is way too expensive but we can leverage our high volume gasoline and give them 350 bar to 500 bar at a reasonable price to get them to a common rail design that gives them a lot of benefit and flexibility as well it also helps on their calibration and their time to market because if they're using a mechanical pump, an injection system, each application takes a lot of time versus on a common rail, it's just a calibration and it's just a software change. So it saves them a lot of time on launching your product as well. Okay.

Speaker 3

And then the margin targets you're targeting like 14 to 15 percent. I think the midpoint of the current guide is 14 anyway. So is it just really growth driving that or are there additional cost elements?

Chris Gropp, CFO

Yeah, just our normal incremental, you know, high teens, 20% incrementals on the growth is what we expect now some of the usually the follow-on question is you know with our aerospace those are at higher margins but those won't be meaningful till after after 2030 coming on so we're just through the end of the decade we're sort of just targeting keeping in that reasonable 20% incremental margin range and that should get us you know we

Brady Ericson, CEO

continue to convert um that'll kind of get us towards that 15 kind of the higher end of that range by the end of the decade uh and then our expectation is that that becomes our new floor and we continue to grow with aerospace and defense and conversion that'll continue to inch up a bit um we did have a bit of a probably lower than we were expecting that's why we were what 13 7 last year yeah um because we had you know headwinds from uh tariff pass through which was dilutive It was dilutive from a percentage standpoint, not dilutive from a cash or an EBITDA dollar perspective.

Speaker 3

Got it. You mentioned aerospace. I mean, what is the latest update on that market opportunity? What are you providing? And then, you know, it's in that sort of 6% of sales, I guess. So how large is it today? It's pretty small, I imagine, right?

Brady Ericson, CEO

Yeah, I mean, it's the aerospace and defense is just ramping up now, the first one. so of that six percent it's zero as of last year but it's it's starting to increase and we launched our first one in q1 second one uh this quarter our third one uh with our with our one customer launches beginning and part of next year and then we just announced our our first uh our second customer uh for an unmanned drone application for fuel injection as well and so we're starting to get that momentum starting to get more customers uh getting out to all the different aerospace space shows, whether it's Farnborough in the UK, Paris, some of the US applications, getting to all the engine manufacturers, the four or five engine manufacturers, they're doing tours of our facility, they're seeing our capabilities, they see that we're in production now and we're performing well, and so I think it's going to continue.

Speaker 3

These are for the drones and larger applications?

Brady Ericson, CEO

Yeah, there's a large jet engine for a military application that's pre-combustion, post-combustion injectors, as well as a fuel control valve that we're doing for them. and content is going to be really high from a dollar content per engine not a lot of engines but i think it's it's proving that we can support them uh with their lower volumes uh longer term it will come with some of the mro and kind of service business that comes with it as they start replacing them over time because for them it's just around number of hours of usage and then they'll replace it um and so again our our hope is as we continue to you know make inroads and prove that we're capable, you know, we'll continue to grow that as a percent of business. The really nice thing about it is that it's the same engineers, the same manufacturing capital, and there's really no increase in R&D or CapEx spend or anything else that we need to do to support a lot of these new markets. And so we're just leveraging what we have and our know-how.

Speaker 3

And your investor, I was actually slightly confused. So you also have like a $5 billion target in addition to the $4.2 for 2030. Is the $5 billion sort of including acquisitions? Is that where you're getting at? And how are you thinking about it?

Brady Ericson, CEO

Yeah, I mean, the $5 billion wasn't by a specific date. It was more of around, hey, as we trend towards $5 billion, whether it's with some M&A, whether it's just organic, this is how we think the company splits will change over that time. And so light passenger vehicle will be less than $20. Light commercial vehicle is going to be in the 10 to 15, you know, aftermarket is going to be north of 40 off highway industrial and other will be north of 10. And so we're kind of going down that path to try to give an indication to investors how our portfolio and end markets are shifting over time. And so whether it's continuing to focus on organic in those areas or we do M&A, we may get to $5 billion a lot sooner than 2030 if the right M&A comes up at the right price that's in the right end markets that we want to be in.

Speaker 3

And what are, I assume it's mostly non-auto, there's not much to acquire.

Brady Ericson, CEO

Oh, absolutely. It's commercial vehicle, medium-duty, heavy-duty, off-highway, industrial, ag, construction, or even pure aftermarket companies. we are we are not going to be a consolidator of light passenger vehicle combustion engine

Speaker 3

components that's not much to consolidate either answer so you said earlier some of the smaller

Brady Ericson, CEO

players are falling out as they're falling out and demands going down so it doesn't for us to go and acquire one of our you know smaller players it doesn't make any sense because their product is different than ours and why would i pay anything for them when i can just win it organically you know through the next rfq so there's no reason for us to go and try to acquire other fuel injection folks what i was also trying to make a point of is we're not going to buy other product lines that are only focused on light passenger vehicle combustion okay it's so there are other players out there that says hey we're going to be a last person standing we're going to consolidate you know these different assets of light passenger vehicle that's not what we're doing, we're shifting our portfolio more to off-highway industrial. Okay. And are there good,

Speaker 3

you know, is the pipeline pretty rich on those assets? I would assume it's a little smaller on the sort of non-aftermarket and maybe bigger on aftermarket in terms of size of opportunity. There's a big, I mean, there's a lot out there to choose from. It just needs to be something that

Brady Ericson, CEO

we think is synergistic with our portfolio. It's focused all on aftermarket or off-highway and commercial vehicle applications it has to be at a you know hopefully a good margin good cash flow being eps a creative synergistic with our portfolio and the price has to make sense versus our own share price and so that's what we did with with sem cv focused off highway natural gas gen sets good strong margins growth profile was a little bit higher than our two to four percent and we got it for you know five times that makes sense for us and so those are the types of assets especially if they're similar in mix uh to what ours is if now we're trading that was when we were trading maybe at six six and a half now we're closer to seven and a half so that opens up things that we may look at but if we see an asset that's a pure aftermarket would we pay a little bit more than seven and a half we probably would especially if it takes our aftermarket sales from 35% to 45%, that starts changing our portfolio as well. But we're always going to take a look at it and compare an acquisition multiple and what it does for us versus just buying back our own shares.

Speaker 3

And how are you thinking about that near term between buybacks and M&A?

Brady Ericson, CEO

We continue to do a lot of buybacks. We bought back over 23% of our shares since we've spun because we still think it's a very good investment. But I think our average price was, what, $46 a share of what we bought back, 23% of the company. So we think that's been a pretty good deal.

Chris Gropp, CFO

Yeah, but the target, I mean, obviously it's going to be dividends first. And we've kept those steady in terms of, you know, kind of total dollars and raised that a couple of times. And then it's going to be prioritizing, you know, share buyback, you know, organic, but share, you know, buybacks, but M&A just kind of balanced out together. So it depends on what comes up. And I mean, M&A is very specific. You have to find that unicorn and that idea that is a good idea for us. But that's not necessarily, that doesn't come fast and easy and you can't schedule those out.

Brady Ericson, CEO

Yeah, I mean, Chris and I have been involved in a lot of acquisitions and some divestitures prior and there's some good ones and there's some disasters. So we're not, we don't have rose-colored glasses on thinking, hey, acquisitions are this cornucopia of greatness. And so we're very pragmatic and Chris is a lot more pragmatic and…

Chris Gropp, CFO

Because I've done a lot of integration of bad ones.

Brady Ericson, CEO

So it's a nice… yeah it's a nice balance and so again our our view is our base case is growing our two to four percent to four point two billion continuing to buy back our shares having a good dividend maintaining good leverage generating a bunch of cash so that's our base case and so any acquisitions has to deliver more shareholder value than our base case and if we're trading at you know multiples that we think are you know lower than what it should be we're to continue to buy back shares if we can dig into you know gdi where is penetration today

Speaker 3

where do you expect that to go is that going to actually give you sort of the next five years additional growth even if the internal combustion engine so it may help a little bit i mean they're

Brady Ericson, CEO

in the 60 65 depending on where it is um we're actually seeing um not a lot of increase maybe a little bit of increase in gdi penetration globally partially because as they as they ship so some of our natural gas winds in india are port fuel injections and so it's alternate fuel same thing in brazil our heated tip injectors for 100 ethanol they're more the port fuel injection than the direct injection we see also with the range extending evs they're going to look to a more basic and they're trying to make it as cheap as possible they may stay port fuel injection as well see a little bit of mix in there but maybe a little more towards port fuel the hybrids the pure combustions they're more and more going to direct injection so it's a little bit of mix I don't see a huge swing in and GDI penetration rates that are gonna drive our revenues I think alternate fuels is gonna be where we see a lot more penetration and growth and content

Speaker 3

per vehicle I guess that would imply it's going to be pretty similar then yeah it's going to be

Brady Ericson, CEO

similar on their alternate fuels I mean the heated tip injectors add more value than just a standard injector alternate fuels you're going to have different materials that add additional content

Speaker 3

as well can you talk about earlier so you said low teens to mid teens market share in injection systems I mean and so you really have just the top three how much is left that's fragmented and and have there are examples of companies that have actually closed shop or is it just yeah i mean

Brady Ericson, CEO

vitesco's sold off some of their lines and closed up shop morelli's still kind of going through a bankruptcy and is only in a couple different spots uh conti as well um now some people have bought their lines maybe for aftermarket and whatnot but it's there's not another major player that has more than a couple percentage points um the especially when you go to direct injection there's really just it's it's three majors that people are really kind of focused on and there's nice about this is because there's such high barriers to entry from the machining and designing capability and the whole system integration there's not you know a low-cost Chinese competitor in this space either and so when we're in China producing in China most of our customers of the local Chinese OEMs, the BYDs, the Li Autos, the Chang Ons, the Dong Fengs, the Weechai's. Those are all the people that we're supporting for that local market. And then when people ask us, hey, are you concerned when the Chinese are going into Europe? We kind of say no, because we're on the content in China. And when they ship it to Europe, that's okay for us too.

Speaker 3

Okay. I mean, I imagine it makes sense in China. They haven't led an internal combustion engine, so you haven't really seen any competitors emerge there.

Brady Ericson, CEO

no no i mean it's the other other challenges if if you take a look at our numbers as well we get about 100 million dollars from customers for non-recurring engineering calibration support software support development integration and especially in china they were farther behind on combustion and so they outsourced a lot to suppliers and so we'll design and develop the complete system from the high pressure pump to the high pressure rail to the fuel injection to ecu to the software and the calibration and we'll do all of it and so the chinese competitors they may be able to do one component they can machine a rail but they can't do the injector they can't do the the high pressure pump they don't have the software and electronics capabilities all under one shot and so we've got a really strong position there as well we see that benefit coming to the western oems as well because when they made their big shift to electrification many of them fire to let go all their combustion and calibration engineers and now they're having to try to find them again and or outsource it to suppliers to help them in that process and we

Speaker 3

see that as advantageous as well. And you mentioned earlier you're actually taking some share from Denso and Bosch as well. Why do you think that is? I mean they've been solid players. Again I think

Brady Ericson, CEO

I mentioned with some of the investors earlier is when people thought battery electrics were going to take over the world they said hey let's consolidate down to one supplier and then we can only manage one on the ramp down rather than managing two or three on the ramp down so bosch's market shared over 50 percent yeah so now that they're realizing hey these engines are going to be around for decades to come we may want a second supplier rather than being reliant only on one and so we're seeing a lot of opportunities we saw even more wins probably in the 22 23 time frame as both Bosch and Denso were de-emphasizing it and they were going a lot of different areas. I think they've started to come back a little bit, says, hey, we'll support more, but customers are still looking to move to a two-supplier strategy.

Chris Gropp, CFO

We've also had customers come back because they would not commit to being in place beyond 2030. So in other words, yeah, of supporting the programs beyond 2030. And obviously, especially if you're a CV player or a pass car, you have to have that support that goes on beyond the end of the decade. So we actually had customers come back and say, OK, we can't place this program with them. So let's revisit your bid because we have to have somebody here after 2030.

Speaker 3

So some of your competitors won't support post-2030? They won't commit.

Brady Ericson, CEO

Won't commit. if you take me take a look at their annual report saying hey they're trying to reduce combustion exposure by half so and again it's again if you take a look at both both the two major competitors their fuel injection business is a really small portion of the total company so for them to exit it's not a big deal we're people customers both oh we in the aftermarket they come to us and they know that we're not going anywhere they know they're going to be relying on to rely on us for decades to come and that was actually one of our customers a few years ago when they were quoting us for a commercial vehicle that said we're looking for our partner for 2040 and beyond and so if you have someone who's saying they want to reduce their combustion exposure is not going to give you commitment beyond 2030 we're kind of out of the game or even even if you've been known to sell off different parts of your assets and you're not sure if they're gonna sell that business to a private equity or you know another unknown party that's risky especially in the commercial vehicle industrial world where relationships that last for decades because of all the service parts

Speaker 3

requirements what about diesel I haven't heard that mentioned in a while is that flatline is that actually maybe even a tailwind now or is that just me I know a

Brady Ericson, CEO

A couple of years ago was like a bit of a drag, I think, well, the light vehicle diesel has been a drag, but it's pretty much plateaued down here. I mean, it was seven, eight hundred million of our revenue, I think, in the mid decade before the issue kind of came up in Europe on light passenger vehicles, light passenger vehicles. But we've seen it come down, you know, probably close to a half a billion, but we see it kind of flatlining now. I think our European business has, you know, was declining almost every year for the last four or five years. And I think we finally see that stabilize and flatten up and they kind of going back to growth. And that was a, you know, a headwind for the first three or four years of the decade.

Chris Gropp, CFO

But our total diesel portfolio, if you cut it across service, aftermarket, CV and light vehicle, it's still a third of our business and it's basically flat still. still so it's still a sizable chunk and depending on what happens with CV for the rest of this year next year it'll actually go up a bit that makes sense it's still healthy it's still it's still a healthy business overall so imagine the commercial side in particular yeah yeah yeah um what about

Speaker 3

ECUs I think it was a lot a year ago you or more than that you talked about how you're going to develop your own power training to use any progress there any update there is that yeah

Brady Ericson, CEO

we've actually uh have already started to launch some of them again there are our designs our software but we're still using our former parent and looking at others or more of the ems provider for our new designs uh and so we continue to and i think we've announced a few of those wins from a complete system standpoint uh we're just too small to manufacture them in-house um you know until you get to that billion dollars of revenue from from electronics it's very difficult for you to go to the semiconductor folks and buy components directly you're going to be buying through distributors so we're still using them and launching new designs as well okay but uh is

Speaker 3

this more of a revenue opportunity or is it more of just a cost savings because you're integrating

Brady Ericson, CEO

it or both it's it's a little bit of both i mean obviously when we got spun the products that we were buying from our former parent were kind of the pricing was set by them so there's really no margin uh in that um i think as we develop our own designs that will allow us to then get a little bit of margin over time as we go to our designs and then we can look at you know other other third parties to say hey can you make this build the print force uh where in the past as when we were integrated with them it was kind of their design our design but as we got spun off uh we took all the ip and a lot of those uh low voltage you know engineers and that's what we that's what

Speaker 3

we've used to develop our next generation product and we've had to you

Brady Ericson, CEO

know add more pins and we had to make it capable for alternative fuels and we had to make it capable for heating tip injectors and other things so we brought a lot more features to those new designs as well okay what do you see as the

Speaker 3

opportunities in the commercial vehicle market in particular because you are hoping to grow there and you know what is your view on where EV goes in that market it feels like it is a longer life but i think tesla's ramping its semi so we'll see how

Brady Ericson, CEO

that's us i think when you're talking about again most of our business and long-haul trucking and the weights and and the variability of how these vehicles are being used i still think it's a long way away tesla's been talking about their truck for a long time yep and i still don't see a lot of penetration we see a lot of electric vehicles came to buses delivery fleets some worked out well others in mountainous regions or cold environment struggled from a TCO standpoint and a lot of customers said hey I don't want to spend four times as much for the bus I need two of them to do what I can do with one diesel or natural gas and so we we see on the uh more the heavy duty commercial vehicle looking more at alternative fuels we see a lot more on natural gas we see a lot more doing testing in hydrogen than trying to do pure battery electrics i know in china on the heavy duty side they're trying to do the battery swap to try to address it that still has some challenges But fast charging, one of the bigger challenges, fast charging commercial vehicle trucks. And so ask them, hey, I need power to fast charge five or six Tesla trucks at a time. We don't have the power, you know, especially in remote parts of the world. And so we have remote parts of the country to where our ROEM partners kind of said, yeah, we wanted to do it. but i couldn't put in a fast charging station because i'd take the entire power of the town so now we have demand for fast charging not there we have data and ai data centers where we don't have enough power and we're firing up more coal-fired plants and natural gas plants and so if you're doing it via coal are you really benefiting by going electric so it's you know so I think the dynamics are changing I think people are realizing things are changing a bit in the assumption on electric vehicles made a lot of sense when you use a hundred percent green energy we're nowhere close to being even even close to getting to all green energy and you know if you look at the co2 and and the emissions that come from producing an electric vehicle which is substantially more than the combustion it becomes a tough tough case to say

Speaker 3

you're actually reducing co2 on the aftermarket side there's established players that are ready how do you kind of broaden in that market I just feel it's structurally just a different market than my vehicle images because you need more distribution you know how are you thinking about that opportunity is it product expansion is it just in more just bolting on new customers there

Brady Ericson, CEO

with retail outlets it's kind of all of it I think we continue to gain share we've added a new product line steering suspension and braking is one that's been driving a good chunk of our growth it's already you know in the 25 to 30 percent of our of our of our revenues and it's propulsion agnostic we're doing it for both combustion hybrid and battery electric vehicles and so it's been a good expansion for us we have the oh we pedigree because customers know We're an OE manufacturer, so it's going to be good quality. We have a very strong brand in the Delphi brand. About whatever we put it on, customers are going to be drawn to that brand because they know it's a strong brand and has a great history. Our team's done a really nice job on making sure that we've got 95% coverage in any particular product line. We're keeping our first-time fill rates in the 92% to 95% range, so we're making sure it's on the shelf to support them. we do a lot of training videos or garage 360 programs to go directly to the technicians help train them not only on our products but just how to properly service a vehicle and so we've we and it's a global business as well which we think is unique for us as well and so I think the team has done it just a nice job continuing to grow the business there's a basic question so you're not

Speaker 3

manufacturing those new products right so you're finding the steering

Brady Ericson, CEO

suspension and braking correct but again we have a team of engineers and we go through validation testing as we do if we built it and so we you know have built a lot of those products in the past we know what the specs are going to be we know what the needs are in some cases it's not just replacing an existing one it's saying hey these are used for delivery vans and they're just getting abused we need something more robust and so we'll design a product that's more robust work with the supplier to make it brand it as delphi and sell it through our distribution

Chris Gropp, CFO

system. So it's got OE specs. We're asking the supplier to do OE specs and live up and test to an OE spec. So it's not just an off-the-shelf substitute. It is literally an OE spec part to be able to go out as a quality product with our brand on it. There are some folks in the

Brady Ericson, CEO

aftermarket that they just go out there and say, hey, I'll just buy those and I'm just going to put a brand on it and sell it and that's their model yeah we don't do that we generally go out and define a product what we want it to be what the specification is going to be and then develop that supplier to make it to our specifications so we're not just going out there and buying an off-the-shelf products that we got a label on it and shipping it got it does the margin lower

Speaker 3

though since another sub supplier so you're still able to capture the same

Chris Gropp, CFO

margin even though the margin's not lower the investment's lower obviously but no the margin's

Brady Ericson, CEO

not lower there's engineering costs and development costs that we have in there but it's you know our expected return on investment is the same on whether it's that or whether it's produced internally so our internal hurdle rate is 15 percent expectation and so aftermarket margins may be higher but they carry a lot more inventory and or have more operating investment and therefore they have to have higher margins in order to deliver the return on investment so that's how

Speaker 3

we kind of take a look at things maybe color on your tariff exposure any impacts there is that

Chris Gropp, CFO

been recovered has that all passed you at this point no i mean it's about the same as as last year it was running somewhere in the 20 to 25 million a quarter range um we're getting passed through we've and we got a little bit of the pass through in q1 that was related to last year so So that was basically even the IEPA tariffs have not affected us that much. I mean, we are going to go back and, you know, because they were substituted. So it didn't change that much for us on a run rate. The only thing that we're in place right now is, you know, going back and trying to get the IEPA tariffs. But on the IEPA tariffs, as we get those, it's a pass along back to our customers, except in the case of aftermarket, which it will be a little bit of a tailwind for us as those go forward. But honestly, we don't expect to get those settled this year. We think that's going to be a longer process overall.

Speaker 3

Any last questions? Cool. I think we're at eight seconds left. That's very good. Close.

Brady Ericson, CEO

Thank you very much. Thank you, everybody.