Tenneco (TEN) 20 Feb 202019 Q4 Earnings call transcript

Good day and welcome to Tenneco Fourth Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note that the event’s being recorded.

I’d now like to turn the conference over to Rich Kwas, Vice President of Investor Relations. Please go ahead.

morning. good and you Thank Earlier this results quarter earnings our we related financial released and fourth information. XXXX morning, Presentation corresponding to Investor our prepared remarks is our section available website. of on the non-GAAP today Please include our aware discussion be information that on financial measures. will

of our release in attachments. GAAP press are with All which measures reconciled

currency prior Also note periods. constant forma include the measured at comparisons that and are Federal-Mogul all XXXX pro rates acquisition in

revenue, comparisons we EBITDA. value discuss The year-over-year margin on mean say say When are attachments it will forma otherwise When release on a earnings revenue. We basis. added add our adjusted EBITDA, means we described margin. Unless website. we value pro and available adjusted specifically EBITDA to refers

our actual could from of any our projected materially our of results in will those some statements. statements. comments that Please forward-looking forward-looking differ Additionally mind include keep in

We the attending forward Yield Auto, in many in you. Morgan the of near Research to of investor Tech JP future New and will conferences Global a We look Wolfe Conference in Miami. Mobility and Auto the be seeing couple York Conference including High

taking Brian CFO, agenda. review performance key on onto strategy enterprise touch messages XXXX update on Kesseler Provide will CEO, will our comments divisions our and review XXXX summarize sheet the QX and Provide performance the to Jason Now Hollar questions. amendment across for our investors. Brian highlights. the closing will then our an guidance before and segment balance and comments on color your quarter. and give covenant. updated credit and

turn over Brian. the I’ll way. that of it out With to

X. went analyst. address our To everyone the investors morning, and and we the Good minds Please to on welcome. to Rich. you, Page of turn Thank major topics start,

a purposeful mitigate been financial facing Over better taking headwinds we’ve create position markets end proactive months, we’re the and our for actions to last businesses. to and in our the several

EBITDA guidance of of these and against and in demand structure You early manage our quarter high delivered the end the our can to as our we cost actions fourth of see uneven some revenue effects results trends. continued

you walking our some steps areas we’re focus I of and achieve to through key the of objectives. want by to the start taking

critical and our systems allowing cost a divisions operate work separate completed independently. completes and reduction requirements in tasks needed on to-date is The we’ve to businesses in a structural First; all benefit the providing market volatile both processes place. to

year This achieved deliver those ability to on - cost brings synergies We Federal our as nearly our we initiatives was rate achieved cost by Building the of me savings year run in the the This second to ahead plan. a $XXX used our from demonstrated end. point. we million of process to XXXX, target transaction Mogul deliver on results. original

to the on XXXX. We are that an of rate incremental cost $XXX run end we deliver in an million savings Accelerate program by executing expect

Third, we’ve coupling actions initiatives our improve to capital implemented those with reduction efficiency. the

flexibility the We positive in recently credit will first Fourth, on to XXXX. expect covenant with amendment ratio our X.X execute the free strategy deliver of adjusted cash our continue we’ve in quarter our facility secured flow addition XXXX. and increases credit cash to to through goals. enhanced provide to that need times we amended flows return an facility our us to This to our

the continue the advisors the middle Lastly, strengthen during to initiatives with last consultation company’s path board as forward. business, alternatives. a evaluation of taken comprehensive and to thorough identify our to our Tenneco the We we execute we has and various these started best in evaluate approach strategic year

value. want that I maximize to time, this at stress team to all board opportunities the anymore share and the committed to cannot management are I While evaluating shareholder

value capital as business. standalone possesses to for be unique Operationally, to make which focused resource commitment different leading and standalone would aftermarket unique contribute divisions models requirements. Each different very businesses the have factors that separate create companies. managed appealing into Different allocation to with that want market to complexity each models separate OE enhanced requirements I businesses. and key business two enterprise X, more Slide through On be division you capital the our continued strategies take to

generally is trade businesses demand higher businesses. more relative to than Aftermarket multiples markets valuation stable, exposure aftermarket OE tend the significant with OE-centric to and at pure

to harnessing division, profiles Given the value the of each. businesses and separating unique unique be can shareholder strengths each these continue we believe by unlocked in significant

XXXX our Turning to priorities. enterprise Page X, we share

performance our Our our Accelerate focused In of cost first that identified operational XXXX. should cost Program. program, reductions This execute on improvements. accelerating incremental solely is this through to benefit implementation we’ve

achieve of in end savings realized XXXX cost Specifically, projects. carryover rate $XXX to we of run of XXXX. about We $XXX estimate will be inclusive the million expect of savings by million

We expect $XXX in approximately million to of in XXXX associated cost the implementation these with incur one-time initiatives.

enterprise Our second of $XXX increasing generation. targeted is we’ve basis, area cash On additional focus working capital an improvements. in million

inventory deployed. standard and are that management terms We our improvement this from come expect ensuring payment most of to

we’ll of this We to realize the of by end value expect the that targeted half be able year.

in are the through methodically level. expenditures few divisions more years. keenly be We a focused of higher moving capital sustained achieving CapEx next this level to We’ve relatively $XXX and embedded constant each expect for on decreasing our our also CapEx would efficiency million and over XXXX investments CapEx

and essential overall leverage. reduction The focus on will our first delivering be third; two the priorities

to We ration facilitating as our in net have of threshold a Tenneco. critical under this from intermediate dry view EBITDA to We in objective achieving debt the spin new set reduce component three the our [ph] term. to times

improvement reviewing portfolios process divisions would and and the accelerate While we plan this asset flow the potential could that we’re our timeline. achieve set objective reduction separation also have sales a We to that note from organically through expedite this actions. cost cash

which Stevens I Slide maximize wanted Chuck, and of board our February Directors. brings financial the refreshment he operating assist of shareholder experience strive of a board X, Tenneco execute on us operating to our will you Xth, On value. an joined as provide Many to we strategy Chuck On our update we announced and to wealth process. Board know

board process our ongoing. refreshment Importantly, is

and we’ve done relevant experiences to over past seek and we the of requisite As development candidates strategy the to continue operations. the caliber our skills who high and year, execution bring

summarize Page financial we performance. XXXX On X, Tenneco’s

As we’ve year We’ve trends. recent been lower the and faced headwinds market through demand to related quarters. over discussing uneven

year-over-year revenues in currency add XXXX. fell margin value Our EBITDA and X% constant declined versus

We are able headwinds and operational cost to improvements through synergy somewhat mitigate these capture.

on environment. We our build any program expect to success Accelerate in position us better momentum for this and

XXXX. Slide business X, lists highlights few of for a our

emissions preparing Carzone, and strategic commercial Air retail to services cooperation channel agreement Clean busy aftermarket business signed We and was off-highway meet VI motor leading to our Our China expand customers company that our for trucks help China segment more standards. a stringent New the further in with parts launches XX market.

programs corporate business industry our with business. first the environmental, GRI in different Ride and between suspension our responsibility the published practices our completed Performance community technologies. Manufactures social build leading framework based our highlights this Global contributions the team advanced report Also year. won Materials comprehensive In further including and social dimensions sustainable economic The Vehicle and is NVH report of of the on lengths integration notable, capabilities to and six the we we our new Electric Öhlins Performance, team

and about X%. GM $XXX by strike margin. Total performance. points. declined forma revenue and million by revenues translated The Page our reduced million basis a to pro labor revenues The on summarize million X%. our strike value QX declined EBITDA $XX margin XX by basis GM year-over-year The our reduced was XX X.X% or add and X% $XX rate EBITDA approximately

CTOH such above New as margin trends Tenneco weakening and industrial. experienced in a margin demand average decrease year-over-year verticals fueled by

EPS DriV margin was X% due flat anticipated $X.XX, the performance. rate by than quarter despite $X.XX. Adjusted lowered about at lower revenues year-over-year tax was operating improved our in EPS higher to

segment our Jason to I’ll Now over it performance. turn to discuss business

business currency performance stop year-over-year Please start basis. the which GM turn operational the with quarter followed Page for Brian. decreased about to revenues prior Tenneco measured Clean basis a by vehicle DriV. XXX in vehicle revenues revenues the revenue, Air Despite $XX I’ll fell the million million approximately labor on CTOH cost in light X% year-over-year. value new down underlying X% about $XXX at year. Thanks XX. points. production add EBITDA by X% constant versus outperformed global light

currency by QX, were flat XX. period. Powertrain strike sales currency. GM X% about versus GM about XX.X% XX.X% negatively revenue for EBITDA Powertrain Slide points. the EBITDA strike $XX to margin at the for quarter. ago decreased X% the fell turn was adjusting impacted however prior Please versus strike GM measured and in was margin XXXX margin year-over-year. EBITDA XX% margin the constant basis XX with Adjusted period. revenue year in The and million in EBITDA year-over-year X.X% EBITDA the

timing negatively income of customers and a related impacted lower margin on performance. year-over-year volume well other addition, as non-consolidated costs certain as In from JV impact

the commercial restructuring average and margin and in demand that improved executing mitigate team results. would business. higher Meanwhile been demand and and we’ve results. is actions on pressure generally When our we additional cost pressures expect the put the experiencing margin are contribution reduction demand from markets Contribution margins in and sudden India the the industrial above incremental Therefore, to China fluctuations Powertrain rebounds business.

by as Lower the by business Page Turning impacted among was XX mainly XXXX Starting product first revenue America Europe. in in other the is conflict which due Federal-Mogul our in customers inventory segment. the consolidation driven several loss with adjustments mix. two and revenue, now in out to also which last included Wipers changes portfolio to similar and customers North with comparison is to pre-acquisition was of the retail in sale channel look large volume and Western revenue quarter. The business called for quarter line at continued Motorparts

effective the last more an lower EBITDA results lower was million lower year-over-year quarter with fourth was XX.X%. X% which Performance in on Page impact strike, in on million EBITDA GM in strike The performance points to control year. increased $XXX than X% the excluding light basis year-over-year the XXX operating and XX. line Fourth The revenue was with quarter Ride segment had revenue production. quarter and $XX negative Fourth and versus margin was revenues vehicle down volumes. offsetting global are continued margin strong quarter improvement cost

million Commercial was industry strike Performance the in truck, revenue and includes business. an reflected GM Ride other the EBITDA lower $X quarter the $XX X% and the from impact up of Öhlins off-highway which volumes. million additions included was and

been Excluding the year’s quarter. fourth last better would margins have GM impact than slightly

At consistent update was our brief a guidance. for with on net leverage debt XXXX XX was X.X Page our $X leverage. billion net and and end debt year to Turning prior net times

flexibility and remains with billion available that financial significant position secured facility to we credit The maximum to was an provides liquidity to reaching the horizon. of increased senior Our X.X that our steps execute fourth near-term strong amendment us gradually through down if our maturities the ratio under after increased on This ratio flexibility. $X.X no us challenging leverage operate week, the amendment quarter by times first XXXX, XXXX. strategy. and quarter Last times until necessary more gives of conditions market X.X

our sheet the As cash a achieve to leverage a our lowering profile will successful program our flow actions, Brian was enhance for separation. we’re Accelerate reduce both and us We priority. cost, believe taking our leverage top strengthen divisions and to generation enable discussed, balance position planned targets

Now Brian. to back

On we’ve Thanks, XXXX of our prepare Page highlighted XX, outlook. to Jason. some the used assumptions

combination global Additional phase continue reduce that Commercial the digits details our Ride in profiles vehicle down off-highway the would in line be are plan down of This longstanding XXXX X.X% complexity to light In in segments. to decisions rates production, production These about down Motorparts the expectation, expected expected the appendix. program trend improve to of we available to and rationalization single in midpoint and truck, revenue expect constant return industry industrial included mid-to-high are of which XXXX, in year-over-year expect the wide and our production X%. our outpacing both Performance by million. in flat at on currency guidance. revenue $XXX global product aftermarket vehicle rationalizations that we are underlined our is decisions

program, margins in inclusive the midpoint. our total Nevertheless, above we efforts XXXX revenue Accelerate anticipate $XXX was with and improvement in-line negative million through the In midpoint expected at million at $XXX by EBITDA of to continuous currency. approximately year-over-year lower the the

the Importantly, positive we and free cash costs for discussed capital XXXX reductions, we working are one-time improvements by driven disciplined earlier. flow planning adjusted CapEx in lower transaction

quarter of Page for the on The first details and full our XX. outlook year are

negative would in than have the Coronavirus monitor of full range its uncertainty estimate This equivalent our impact a recovery approximately of in recovery which a on quarter our automotive and EBITDA outlook revenue our volume represents supply that range revenue assumes The on impact estimated the weeks its or of China of of that year. productions upper of the to not Included the an end for China does EBITDA. continue those first in of lower revenue estimate results $XXX customers. $XX our and four wider is lost be in outlook no full global million The full impact on on of million within the prolonged a industry. chain will and current anticipate the lost We customary. our effects end

like brief environment year Turning EBITDA. before now a volatile I’d to by QX both few guidance open your the XX, we concluded and the give our to questions. meeting a XXXX, revenue In Page to on we navigated line and comments industry up

on the targets DRiV our schedule and acquisition balance intently synergy Accelerate cash in strengthen a on Ultimately separation; our ahead a our having Tenneco focused for delivered XXXX. position and year we’re to almost generation ahead, cost executing sheet. Looking enhance program cost, planned related reduce new of

in confident our continue deliver XXXX beyond. moving on These into actions to ability strengthen our and our to program targets. I’m Accelerate team’s business will

while As a continue said creation through opportunity we’ve separation. we a to compelling planned value see

We company and shareholders. our also our best reviewing ensure path alternatives we’re strategic to pursuing for are the

ultimately We better of regardless business taking and shareholders. we’re the are position of deliver confident of we ultimately which all each that for steps path our enhanced will value the pursue

as to and appropriate. plan We timing provide this continue regarding updates

In summary, me Both in strong team and we confidence of which have consolidated ahead and opportunities us. leadership a the place strategy. of sound a give

the a dedicated focus their more together in efforts thank for the take XXXX. fourth achieving in successful members world all goals of I team also stronger, pride working company. Tenneco, We for results have their on make to around to team our our our want support XX,XXX members in and who quarter in and delivering

morning. to as for interest this ready your take for that, call we’re And joining questions. and in always thank Tenneco our continued you With your

Please comes Rod question Lache, first the Wolfe from ahead. Instructions] [Operator Research. go

I had questions. a couple

what some about between looking additional of business, little there? us First, give on you DriV from can Can this bit that? today. it cost sense a the at give the you what a reduction plan of like sounds towards that the was skewed businesses It detail you more the you’re us description talked the more little split opportunities and two a is bit

about businesses. about run capture process see Rod, Brian. rate we is to in going out went between about lines. the the the find about About new we When to Tenneco and we our to achieved benefits we the that. the and also had This share equal this DriV the expected equal certain we’re that benefit through allows find in could product to support be we get that million expected functions that capacity we division synergy to region, one’s XX two XXX or of opportunities rationalize business $XXX opportunities you continue levels and in more in [ph]

sense are us is bit closing how of of Okay of and could any little the impact company you broadly, running a EBITDA size curios here? if of CapEx significant color to that give are plants on that sort X.X% Your or X.X% of and a plants the around sales, financial more you of the percentage X% is there opportunity up margins? running the below

As our below business, that to general, it’s you in aftermarket run know just the in model. a we characteristic

range the and would of and side probably to X.X% But in the range for the Ride couple range, to and OE the the the look now and of side on the be have growth in of Powertrain business. business. very the high. Performance, In the spikes isn’t We between X.X% aftermarket new product launches. kind OE in across it three-ish side Clean depending on general, Obviously, that is Air get on a we lines then it

just tax us enterprise net exactly you’re one you from and Okay the be the sense was and would whether lastly, or I give Can and of another a the you different any levels then spin stands or can an side of proceeds currently strategic update one have give on you’re value where if that process hoping leaning cash looking businesses of the or kind think of presumably another option - pension option where higher? on at sale or different whatever. leakage us towards word or you about

get some to eyes we process the sure earlier me that we’re year. brought advisory from Let the as make possible We’ve in in announced an at all perspective fresh looking alternatives.

deliver business. We effective we’re have the global especially for on we results Coronavirus and We’ve we make on process. across sure not Obviously set timetable of market. with probably here a executing on to completion the the in that knock now focus uncertainty with have the intently the some of the quarter right got

we’re or open because other it’s the way wouldn’t I still leading process. say one an

are base we’re two but if a is to of that’s then value. is, the a wide there we that that. why to and as divisions individual the a way these each the operate shareholder case obviously, is if in Our in to considering we if believe separately options way in maximize form lines of long-term and spend, open we product - right better highlight division, from sense value makes sale go the division and The all different

or As far proceeds leakage. that. Jason let as grab net I’ll tax

is under or the scenarios be as to at, process. the most whether not a not that be hindrance tax under differentiator Sure. tax the most most evaluated we’re would scenarios not is likely have we But to I’d that always the Certainly, do going efficient. going tax free we looking spend that to to say most something. is

be returning around terms cases. in shareholder of most in and highlighted Brian will this what much the value total So, very

of terms in type actual upon pre-tax going think it’s proceeds influence. I to dependent be the gross of

you. great. Okay, Thank

KeyBanc go ahead. from Markets. Please comes call James Picariello, Capital Next

million million the revenue out then, when impact savings of the expect or and would what you’re $XX the or rate run Within lost abate? you volumes the any was of million not And DriV’s carryover about to in Performance year. to XXXX structural Would from some this Ride require now that impact called plant be in headwind is, in of out next XXXX the achieved recapturing closure $XX $XX any does calling full thinking guidance, you the end by follow-on necessarily?

in we’ve kind the all last about, From question. North be, is the it’s controls would America business would Ride way that that the the Not think volumes part that Control of really Performance I about, Ride been plan talking a little per as see they this those by we’ll then XXXX. QX bit, we is and out beginning volumes the XX see balance of lap middle in the started out that to of year where we’ll

As run rate of to million we’ve end $XX about expect XXXX. footprint run $XX said before, our beginning on million into rate improvement the we this at

improvements key there volume we’re low out that’s million that I within that of addition we’re about and talking up relatively margin highlighting. $XX think the volume all taken that is, been wrapped it’s is the

So, line, into XXXX thinking to any impact top but impact. a spill does over not the certainly we’re significant an as

there fact, carryover cost for XXXX from reduction. to underlying savings effect the should it In XXXX through to the relates as be coming additional

could And roughly half over the into be the of spill XXXX this headwind in year?

a little bit less. Probably

the you’ve Thanks. relate then, calling to the and separate based a $XX thinking is baking been in complexity confirm for impact million progress for the was dynamic manufacturing impact are your year? XXXX call this $XX I be lost a out with Motorparts. does DriV is within product you to think just the reduction. on XXXX in quarters this And this item? through Okay lost here. legacy share million and you you due the progress assuming that new share then can out and this What what to about other respect bucket The or

XXXX. three-year fully of equivalent about the We [ph] that get the we me that period million. channel conflict Federal-Mogul the in $XXX first. XXXX, of after some two, losses beginning transaction XXXX. was lost business experienced as now drew in and a we before Let exit We In lapped

and and as about done job nice had into is that that will very I and XXXX. about point. confidence regain alternative a we ramp With feel to as some wouldn’t of we XXX that they’ve go of estimate going relationships and we’re the so, at real back exactly we on a in talk it’s that. ramping captured - third to be work to of in, much going they the going want the to think Obviously we a wind believe to [ph] about is and little the we’ve of customers team find sources I this be to where to good up we’re how But that tough - at things ramping down

reductions optimizations that into me manufacturing and Let maybe we’re complexity the or get doing.

XX-XX we regions to we lines. taking We’re the Motorparts execute; that we our categories seven We’ve to and seven deliver product inside have have approach in a got categories product the disciplined business. we customers, all XX those product distribute

each identifying where so, we’re product from some that lines where good value very capturing region, lines there are through exiting the we moving categories we very, and product with and lines And products and different we’re the most offered regions. And that and offered complexity and to in are aren’t methodically generating and product there. as analytics

actually focus regions existing growth. in on need based our to categories are some we We where different

be to XXs our our in I’ll lines attention, call we is customers in reduction, away as that turn X,XXX we business. [ph] Motorparts customers term, have our [ph] decisions the and In those product but there’ll revenue expectation focus approximately and the the that would medium in some drift XXs complexity

with will We continue decision. network to for the those optimize

the our profiles our continue day, and flows to in into, ready we and those. this cash of are decisions the our what return return got assets improve So, do The we’ve is [indiscernible]. expect to to end we’ll improve would

Appreciated. Thanks.

Stanley. from Next go Armintas ahead. Morgan question comes Sinkevicius, Please

the XXXX XXXX the your generate to adding in you exiting It in that. cash and from of that leverage some flow for X.X about at XXXX, free out leverage costs and look I the gets about guide at look by backing for I When still times restructuring at end X.X you the on three spin? track this the three spin anticipate just to and get targeting order this of term when you leverage that on Is for intermediate I’m or times leverage year to be spin. do able to in with XXXX execute the wondering plan

we year points, times. at Well exited couple X.X the

Right.

And we’ve got for reason. range our the a in EBITDA

going of impact can of any much go work to not without to with that coming this it We’re continue as and on back. we to Coronavirus - offset counting

to So, different couple we’re we we a markets once come down the or serving to up it’s a are, to driving mark. be open window range, where going then is move lines under to the and line to Sale sides. of together how that a, can To this spend DriV always in top they consideration, that at several on imagine we variables for pegging get the particular time. at we’re of the business be product product obviously end of a consider. refinance get we’re looking very will see uncertain but we not have data to more our point We’ll leverage a end the peg that stable to because as you we three the

need separated. have operate financing the sure variables make markets But is way already to to there. structure capital two solved sure gate they that we’re are execution, businesses want conducive all reiterate, the the of We making operational reason right not the out an the structure I’ll the an to coming from We’ve to. side the only affordable

a improve get out can - it So, little depending on on there because come push performance is there, we’re any could that market that little a end bit. timeline variables a specific or a lot not spin in of putting

sure So, execute we’re deliberate the on value shareholder present on we’ll intently the alternatives the we’ll strategic that Making focused and we’re maximize being opportunities disciplined as executing on. themselves, and very business. -

together to going than couple quarters a lot that going is reminder a leverage using for be of we’re so more important it important going other and streaming couple imply, think view of about and it’s to sustainable of business because just XX-month course ratio When elements to [ph] to trailing type that of XX Yes, ourselves. a be that you leverage be view. trailing really those forward a that’s

ratio just included think we that example, noise we mean in potential to forward guidance the the the we the in first from leverage in it we’re necessarily quarter, make sure so ensure as these be that earnings need have impact GM this for as just add had to businesses. fourth quarter For that that’s we how of Coronavirus for should a doesn’t strike will certainly makes sense we to relates our some sustainable normalizing forward, because those we business. substantial Likewise, effects about go underlying

maybe whole reporting Okay this Aftermarket touch soft bit you business. can the were results. when think do and we aftermarket How on was there. then year quarter you first the starting at first a about Last and the the we just look cadence business year there? XXXX? of does and holistically the Are comps there quarter to in look some for aftermarket easy how

pretty of Let me talk out the about came strong. first quarter in We last year. gains

- the program. kind back about I’m rationalization the We’ll on first end hurry. divestiture a have of and quarter. of Motorparts pleased entire more lapping of dried doing one the had here doing January that the with at I performance. segment and the a quarter the in complexity okay on quarter half February really we the industry think up the of been covered obviously Wipers was the we’ve very We about

several in year. the other of side if our go year customer taper about we conflict America, in. to some Last take two X% expanded more closings. large distributors Obviously I channel those same optimization. from Wipers the margin had XXX one and store the The in business probably out, about some coming currency of the again, North for off, destocking points, loss the customers Europe at middle the destocking were inventory down and starting divestiture, one through the and we and pace consolidation is significant the as we And year-over-year accelerate especially of knew basis in on things they

We’re taper starting to off see too. that

as the to But and strong the in we’re put vehicles those and team the aftermarket North of good feel optimistic. making. right progress age. mix aftermarket product medium short I work the the America about categories to is I’m continue Europe, product business the investments real we to in China lines continue operation long-term and Obviously, As making and in and

Appreciated.

you. Thank

next go Our question is Morgan. Brinkman, Please Ryan ahead. JP from

looks the Just had for $XXX the savings. $XXX also It But XXXX. year-over-year to midpoint at seeing you’re a EBITDA of decline. guiding like on guidance million revenue around you’re down benefit from million cost question on $XX somewhere million

a pretty business mean basis, I your on imply on decline. core would Just revenue that decremental

are that, channel coming I business know a actions some Just is have realignment as driving revenue those I has And quarter decline the like conflict are or in I the in high what’s impact follow-up. curious first to mean Coronavirus but it, an at decremental. of other

decremental would remarks all that, that in low that high implied we end included be the none that’s highlighted China to for of greatest it single and have, and of we as prepared at related the at the The piece end. the

kind can you half. the about imply So, of midpoint and half

can $XX at $XXX So, decremental. revenue, is on million million see fairly you high

the We’re other consistent peers. with also CTOH reports in seeing a guidance weaker lot of and

to decremental but expect So else those a have that outside most as everything well, flow. then you would generally higher

onto China I’d something impact. Yes, margin add the

government mandate. the I would say cost the the So, little is to a it’s stronger ability because than bit usual following flex out

while We not to pay they’re work. have our all at people

manner. our of of variable kind are through makes that cost all more So that in acting like way fixed operating the

entire lot a the of kind packing in, So, coming of that is average.

the walking then, get within those there the How Got just is the cash to expect with and working cash any free you savings it, bridge, much assumption is EBITDA flow from cash much and then in helpful. capital through that’s including how restructuring reason the also like free just to And bridge flow. one-time lot numbers? there

plan. the two-year is million to year, the we with course it The $XXX over that in and roughly restructuring associated capital of working the then. half highlighted performance $XXX said million we as the when Accelerate The relates plan the

About then. XXX

In be years the few XXXX, estimate that be within is a the have initial around ago, end with that’ll the settlement antirust little And associated this plan XXXX. also cash then this of at should a remaining we behind moving from the payments bit. certainly spend as which

a working that? so capital positive it, year, Got is is this

Yes.

Okay.

and from the Synergy about for the spread as efforts first completed is end to fairly XXXX projects somewhat can years so $XXX That’s right. couple first think in, an are at million this the were XXXX, additional million continuation over about XXXX be we where the so and being and and the now in you the And it cadence of the you similar of than think XXXX $XXX step doing progress XXXX more similar of already it synergies will that out next of. can

it. Got

payment. you I sizable on it million, restructuring million the seems work So, $XXX of like, cash to the they’re if from $XXX drag some and EBITDA settlement to mean the

XXXX you we Thanks. to progressing? any like go can do one look how also think XXXX see a CapEx you will timers in EBITDA in much all. do how of then that be But from do perspective obviously direction. repeat If and That not

year the in further this million reduction we We restructuring anticipate think XXXX million we’ll after next less call. $XX Accelerate CapEx and mentioned continue $XXX to program antitrust making about about through here million see, the on constant we’re $XXX payment would XXXX. our in capital I about would improvement. as working We imply coming envision to the and over to that couple years be in would of have

Yes, little a color. additional I can provide

separation. for category payments the $XXX we’re that transaction final earlier on antitrust more it’s million top any million. of turned think separate other XXXX, legal a earlier. the year that that, finalization single we’re of And in that about the then XXXX, associated payments about entities out still tax for little of that half cost in terms be highlighting the necessary thinking referenced than about to to then of less with than I that, I $XXX in And

fairly at anticipate and transaction XXXX, paid to in $XXX that we being and future in of all it’s up likely You antitrust would million about that’s that unusual add period. repeat not

much. Got it, helpful. so that’s super Thanks

next [Operator Spak, question go our from Instructions] Capital. ahead. Please RBC Joseph comes

million, proceeds. cash flow, is Maybe the know should to thinking $XXX what also just for sticking in I with looks definition like we includes been it’s your be historically that about $XXX free XXXX? It factor million like

we fluctuate business the mean flow flow as our a [indiscernible] just being bag just through factor like the It underlying proceeds. with as going not the piece we be cash total is relatively come factor. whole - But small it’s Remember our bag but whole cash so it’s treat going measure how in to relatively should for we cash be to consistent. decisions that It’s only piece performance. percentage flow, that I treat it

the you sort that, does help then that the more mostly by about guess of be related help that you could bit in intensity flow And a think Is helpful. of capital more aftermarket I and cash different about that know But just thinking you division talked little business. the and about us? I could up division. broadly, would of to breaks DriV receivables us enterprise maybe free if how some sort

weighted over that’s certainly the with with it’s that. term, with of standard, more consistent the longer more Motorparts is towards so factoring The industry Sure. business DriV

years the and of couple dynamics it’s relates have and guidance similar have as it cash level fluctuates to to it the the division Tenneco. relatively the the view the of As the divisions, flow well over depending operating volume new as of characteristics as last underlying consistent DriV generally percentage of consistent. flow is timing with course consistent at plan They of revenue upon a year-to-year. future our cash pretty but individual the

cash? in that’s The charge, restructuring million all $XXX

be cash, would That correct.

in work Like And right. mean change the just struts bunch sort sort have to I some of that picture. what of XXXX. you I margin is the also competitors having but overcapacity. industry about the reduce done you of that going is broader at the that, In else definitely deteriorate ride or of to sort of level like capacity. there sort started talked to business. all bigger and action, industry an business guess past But - continue it. Okay, guys some in shocks controlled competitive in Like [ph] how dynamic in of then

If years deliberate a in we’ll somewhat in we we’re we’ve at gaining go market, been think a couple North the our business and side with the struggling have and and [indiscernible] it in to of taking do share We capacity America major our regions. If about competitor couple happy China, a and been and conventional there there. bit our back about where I same cap I very moved where been the there’s on three in the in down little to the sense Europe. Europe that footprint capacity side

So, haul. set I get North think long side to, the a we as pretty conventional well for America from up footprint forward consolidated we’re look the

And as the the rest is industry well? of rationalized

is we’re we on. those challenged of year. have Obviously, where end Western footprint a our going European is I this there the up at that mature that - ending there I gets more a everybody rationalization But - markets with we’re happy think that in is all tell the as some competitors here you understand we’re little can aware. of

very you thank Okay, much.

and session for today’s question-and-answer our attending Thank concludes presentation. ended. is This you now conference the

You may now disconnect.