Vertical Mix
Q: What are FY25 vertical percentages?
A: Management noted that although auto and industrial segments face softness, the medical segment—despite declines—will be relatively modest, with the overall mix continuing to evolve. "

Braking Impact
Q: How significant is the braking revenue loss?
A: They did not quantify the lost revenue but described it as similar in scale to the impact experienced from the FDA recall. "

Industrial Shift
Q: What drives industrial revenue amid smart meter issues?
A: Management highlighted that the return of climate control, acceleration in factory automation, and emerging off-highway opportunities will help offset commoditization challenges. "

Capital Structure
Q: How will the new Treasurer refine capital structure?
A: They emphasized improved working capital management and debt discipline to maintain a strong balance sheet and preserve dry powder for strategic opportunities. "

Share Repurchase
Q: Any change in share repurchase plans?
A: The repurchase program remains intact, designed to match LTIP needs and support EPS growth, despite the challenging revenue environment. "

M&A Potential
Q: What size M&A deals can be absorbed?
A: Management indicated that deal size is less important than a strong strategic fit, with banks ready to support any attractive opportunity.

CapEx Allocation
Q: Where will FY25 growth CapEx be focused?
A: Capital expenditures will be split roughly evenly between growth and maintenance, concentrating mainly on strengthening the automotive and medical areas. "

Inventory Reduction
Q: How is internal inventory being digested?
A: They have reduced inventory by approximately $112 million this quarter and expect similar digestion trends across the verticals going forward. "

Demand Trends
Q: Are weak orders cancellations or delays?
A: Management attributed the softness to delays rather than outright cancellations, expecting normalization after the election cycle by H2 ’25. "

Volume Backfill
Q: How will lost volumes be backfilled?
A: Lost volumes should be replenished through new program launches and reallocation within strong customer relationships. "

Tier 1 Change
Q: Why did a Tier 1 customer stop production?
A: The stoppage was due to a commercial agreement shift by the OEM, not because of quality or pricing issues. "

Steer-by-Wire
Q: How are steer-by-wire plans affecting business?
A: Management is actively engaged with key customers on steer-by-wire initiatives and supporting production relocations to ensure sufficient capacity. "

Customer Inventories
Q: How lean are customer inventories currently?
A: They reported that while automotive customers still have some excess inventory, industrial and medical customers are operating much leaner. "

Climate Control
Q: Is European climate control at risk of commoditization?
A: Not significantly—European exposure is limited, with most climate control business occurring in North America where products are less susceptible to commoditization. "

Guidance Updates
Q: What’s the cadence of future guidance?
A: The company will maintain annual guidance while providing quarterly updates to help the market with modeling. "

EV Tariffs
Q: How are EV tariffs impacting China business?
A: They acknowledged EV tariff challenges but clarified that their China operations are viewed separately from export markets, with global EV trends still uncertain. "