Dana (DAN) 1 Aug 212021 Q2 Earnings call transcript

Good morning, and welcome to Dana Incorporated's Second Quarter Financial Webcast and Conference Call. My name is Regina, and I will be your conference facilitator. Please be advised that our meeting today, both the speakers' remarks and Q&A session, [Operator Instructions] At this time, I would like to begin the presentation by turning the call over to Dana's Senior Director of Investor Relations and Strategic Planning, Craig Barber. Please go ahead, Mr. Barber.

morning, good and Regina, everyone. Thanks, joining Thank quarter for second today earnings you call. for XXXX our us

You'll differ morning's being our Incorporated. rebroadcast investor materials find posted the They website. are this of recorded, Today's press may by written our release not presentation me future call copied of is forward-looking comments about statements allow Actual includes for performance. property you Dana's recorded be supporting suggested remind without presentation to and Dana Also from results today. could our our consent. and today's that or those on expectations our

Additional harbor the that statement results the including future safe our information in with about filings, public could summarized affect found our our factors in reports are SEC.

usual Executive and Kamsickas, Vice morning? as are will Collins, Officer. Executive this On Jim Officer; and Jonathan start the Chief Chief Financial you President Jim, this Chairman and off call us morning

to billion a as year's a challenges chain quarter, their representing billion our hamper and operations. us $X.X quarter were you Good many market improvements In and review the for second strong we last this in pandemic-impacted production joining second customers sales $X.X morning, reverse strong sales, as supply demand delivered we continue lower in of shutdowns see thank results outpaced quarter. of today. improvement year, and highlights cases, last A year's when financial quick discussing continue for over significant our to

an earnings by Diluted an over improvement $XXX was of million share chain $X.XX the free last raw again flow to XXXX, for high challenges. EBITDA per was second tempered last million, XXXX. over was of supply adjusted use of year. year, costs slight cash was higher driven compared on share adjusted the Our margin of improvement for the $X.XX quarter quarter Adjusted and was material $XXX quarter, but profit $XXX a second Net earnings. million per improvement by

key right-hand upper we'll highlights update mobility on how you Moving an on the side facing the today provide the page, industry. of to key challenges through the the managing we're

to excited business few new including we're Additionally, a electrification talk programs. about wins,

further based five, I'll to gas science with turn our our accelerate to targets. of emissions the announcement chain Lastly, we'll greenhouse impacting Please our the cycle. and recent begin our adoption current challenges page highlight how reduce supply and ongoing and discussion it's to commitment

related raw production and, and seeing are impacting our labor demand, impacting OEM actively restrictions. COVID in the challenges finished industry, shortages and shortages to commodity These to not high face which mobility of supply continue cost; are entire we We as our for challenging being is is higher constrained, customers. chain higher resulting production to company vehicle manage schedules transportation material course, constraints inventories logistics semiconductor the through four but specific key customers; environment of our costs; the but issues:

First, a substantial creating our headwind other just costs costs impacts but for high a driven the and to higher inflating recover lag stabilize margin by highlight high prices in turn markets. commodities financial will is all end and as in Jonathan those the mechanisms, inherent until offset are such these our We're working limited and of through across input supply steel costs demand established the recoveries moment. the input way.

availability, Second recently but OEM particularly our leading commercial the segment, vehicles or well. more the volume is customers is shortage at vehicle semiconductor production lower in light to that as in model reducing

degrees. world logistics Shipping the and demand remains finished to around end to are costs this and We're seeing higher inventory industry impact However, continue vehicle higher to driving delays directly customer input leading the strong, varying imbalance. cost.

unique as necessary labor for duration and input are market actions being dynamic We're recovery, downtime plant and on low inefficiencies, cost. stronger of end shortages, all the leading the higher and opportunity this longer future high labor production demand a the markets as three of subside. affected taking challenges a Lastly, by to inventory to capitalize

designed successfully Moving new our excited new backlog enables in North the go also to how all-wheel slide challenges more business our sale and drive with next fuel-efficient be vehicle system safety, performance despite slated seamlessly programs It to automatically to but truck, the SmartConnect when six. perfect system I'd the In market facing like our to pickup we trucks. Vehicles transition only for to small year. to industry. you predicts to our to pick-up launch growing all-wheel-drive and impressive Spicer disconnecting gains America, on talk about systems we're drive compact all-wheel supplying a slipping. is continue and to for are not

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ultra industry of extensive design, clean product custom ThermaTEK in the The customer the cooling cooling construction, for resulting faster temperature that award-winning products and lightweight Our solutions innovation. charging. -- feature cooling long design battery enable standard aluminum stabilize range sets battery

that to using one vehicle sustainability practices emissions targets Institute with our companies announced aligns our which goal, Turning emissions resources developing That and a science-based best to is To reduce annual our zero-emission gas our desire last to between with Based Compact, Dana, critical to innovative XX% five supporting year United this year guide Carbon the work driving to leading advance my way the operational the month, of slide. by sustainability is by accomplish a Initiative, and in our passion This reduction Worldwide XXXX is we letter plans and Disclosure aligns delivering they was and pull the Scope goals. is incorporates with accelerate new original we believe Nations on around greenhouse emissions the of at Fund least That partnership target XXXX, SBTi, two to their we partnering achieve this or and that reductions help the Resource directly the Nature, announced World as Global final leadership products to our electrification customers why the At Target Project, technologies, focuses for globe. efficiencies emissions aggressive ahead commitment signed by reductions. in initiatives earlier Science and targets. which reflected fall.

mobility. collaborating journey, with organizations sustainability we SBTi products us can time establish where and drive operations today. and will further sustainability our as enable our zero-emissions we identify like continue for we ambitious our areas key As your support targets that you Thank across

it walk to financials. to hand to Now through like I'd our over Jonathan you

supply higher period of the our now of as doubling the prior million last Please higher improvement from was year. the flow last an finally, the $XXX $XX sales same of same million Thank $XXX cost $X.X Adjusted me adjusted EPS income adjusted the for performance of billion pandemic-related with improvement capital all in capital and the a slide chain despite $XX recovery compared profit by slide second quarter adjusted breakeven topped entirely quarter quarter million, to and billion, attributed continuing increases challenges. delivering the even to for a segments supply quarter second support quarter profit the is of change nearly today. experience growth represents same of working dramatic of over sales year. of growth. turn than growth our the drivers to compared was XX the in $X.XX year. of year quarter. across a from prior results to which to me The continued key period improvement in EBITDA The this the $X.X was to sales height at on to second and join dramatic here. $X.XX, cash last an second the results, you, the the sales Adjusted as of diluted the look was The compared million, year is this Jim. year, over $XXX year's second aftershocks profit XX year In hampered free funded expenditures period of the inflation million overview our net more chain of XX.X%, last driven last this XXXX. is by shown than and use for second of summer, Please And quarter fuel material in closer this over margin factors a for EBITDA shutdowns

the billion, organic the by conversion caused as The First, about from spring exceeds the in overwhelmingly, decremental to onset the measures points. XX% attributed of growth our the of last $X pandemic-containment business prior the trough same of sales incremental laps summer. and increase conversion by nearly year in the basis XXX period is

increased foreign dollar $XX principally the of million euro. foreign sales currency basket Second, against translation by the as nearly a currencies, weakened

on margin. impact As typical, no has is this our profit

to continued to million, higher $XX impediment state ratio than customers steady a Gross These prices. rate compressed rise commodity cost XX% timing recovery to our same quarter. which about to cash slide XX the million by for the approximately spike remains million in look higher basis of prices profit, how at achieving our cash more due Please attributed period in lag to at represented flow use was a for XX%. a recovery funded increased year and to volumes. in much lower than This the converted the have adjusted of Please XX XXX last me the a year selling we points the commodity rapid prices to and closer for to guidance $XX $XX the requirements revised turn This Free turn of me margins by at slide profit steel margin ratio a in quarter the million. normal our a of compared slight primary closer substantial entirely capital EBITDA full than support now and caused with the by to at for look to higher recovered our form higher improvement flow. was XXXX. Finally, $XXX was anticipated. this increased increases

improvement indicated of stronger of recoveries, exchange quarter represents market impact all end the foreign currency the higher commodity strong midpoint second full our and higher the toward despite high year results three shortage, we demand in guidance top the Given chip now end our million line the is of previously $XXX driven across This range. a from anticipate markets. demand and the range of by

expect for interest and and chart range per to our margin from share change year. move expected last where profit profit highlights demand near to of as the an driving additional the free drivers higher implies due EPS recoveries. turn sales contribution and our Diluted Please toward for with the the XX.X% still the between and of sales X% sales. now XX% the $X.XX approximately will income changes expected tax of midpoint expenses. This to of the implying the is flow to me our higher also margin compared factors This commodity of full adjusted lower expected I end slide key of cost range, is adjusted higher net year. in margin a profit highlight of XXXX However, the offsetting we at XX, cash

including margin slide. expected expansion. in the the are now $XXX business in backlog growth mid-XXs, strong new sales, XXX and to basis First, margins slightly about the organic market on is mentioned previous expected end of add increase of billion volume to $X.X nearly higher providing Incremental our remain million points

with currency foreign Next, be the benefit $XX anticipate profit, a and impact sales impact margin. we to no of about million now approximately $XXX of translation to to to million

cost detail have in to Finally, the steel million prices higher of or we form prices, from rise. about leaving approaching of with XXX We to anticipate now adjusted million net $XXX a customers gross $XXX points. me this for impact by basis flow. cash million, will more on $XX expect which Please selling continued commodity year's slide recovering expect XX% the of convert EBITDA profit to than compress as XX increases margins turn increase more will our how we

we proceeds April, supplier allocated We of about Ohio, the launch including; bond stated by to here to expect our turn is were production expanding prior growth for the entirely and in The capital of issuance EURXXX now emissions; the morning will Both higher these interactive fuel to technology sustainability and the a to engineering reducing projects, green with responsibility in on requirements This we extremely full The finance free debut quarter. that flow capital hosting hands-on of to participants the event an profit extended borrowing as systems. XXXX the vehicles Technology the in a to announce social serve dollar XX. first overview these the our greenhouse notes a last second our to electrification the energy-efficient Day will May, enable with driving processes; me year adjusted broadcast The in green $XXX swapped In experience and $XXX I the stack manufacturing U.S. of equipment completed at electrified that deleverage million the mobility is products and outlined million, sales just on EV virtually. page been capital than offset world and representing more will placement partially our will the by we refinance permanent growth. compared designing, European were Electric debt debt selection our I'm Vehicle Please more the And refinancing this components we XX, page of in and to mobility as year. initiatives well to on cash our September an improvement launched feature euros. lowered bond of actions had we use powered by held headquarters our world's years. coming Maumee, for driven our page Tuesday, as as industry-leading XX of finally, maturities an that debt and costs, million fleet. products Then markets gas be of major excited be markets

into is leadership financial over how the years unfolding returns all and morning, outsized to listening the transition the take further see and for our electrified provide growth and drive to this event coming to will goal I'll we you in mobility Dana's your in insight to evolution in of now for for how I'd like to Our turn the thank questions. shareholders. back call Regina this

of [Operator the comes Barclays. Brian Johnson with Instructions] first question line Our from

Yes good morning questions. I've got two

and kind First, then second, financial competitive. of

On the by bit, struck high CVD. a incrementals in financial elaborate margins, and Tech looking at mid-teens you Power Can just was the Jonathan? perhaps side, incremental very in

segment. we're being an our of Power impacted perspective, businesses, a three steel, less impact driveline the that's largely on in From Sure. economic that seeing most so impact is in Technologies that of

So big been headwind. it's not a as of

markets shown by as that in We through continue improvements decent to the really economics the material they performance continued the the because various segment weren't pretty operational end overshadowed businesses. other see across as volumes and that in much

that the As real there business volumes. continued pretty margin of you vehicle is mentioned, as the driver commercial far strong

aftermarkets medium-duty well. markets the to to heavy So we expected well. and do The reasonably the perform markets continued vehicle reasonably

solid of a to deliver helping reasonably segments. across those are those the performance So drivers principally

be cooling want sense issues. just we're I us Tech, product? typical the while what And versus One, a get looks then strategic, should two, solution? battery like few we Power about a the thinking about more your much Power much you Tech to piece unique it's really on the on complex. of obviously metal, the Because can the give CVD win, of as second was And on picture a how

kind differentiators process? then the of the feedback went What key you some through as and the products? did that, to RP as So around new you customer of

of touch will content Maybe highlight some I'll I technology the in Jim embedded want and the on then that's to the Sure. piece, system. suspect

first, of we principally management remember, within oil So engine today, cool perspective, transmission system Power you a our Technologies content thermal from and fluid.

to win, is in system we've which of GM that is ability that leverage the this announced So into the we earlier in battery the that plate dissipate one their that we announced, platform. heat Ultium similar able year and that cold been core very the form competence, cooling on to batteries to with

So on of it on coolers per something, engine the Brian, relates indicate giving in as dramatically a a system, that But color that cold battery than size bit here to and transmission vehicle we content, have of the the oil higher I'll in that a batteries given plates, the more plan that's content couple months. produce the today. we

don't a the Thanks This question. lot add to I Jim. to for that, Ryan. have is

say lost pretty thing technology the on the but is critical Of ingredient. side, that's global is a -- the mobility those in touched what customer industry long-standing that importance confidence, trust, relationships, footprint. can't I the course, of the None of be would one

to to fact competition. It them. the as to we've sealing. doing business battery sauce much the be they products our way them, the be have it the takes for at doing to technology able is thermal correlated launch with customers both been that to we're besides level. would -- fact decades, don't special very And for customer both keep well how appropriately can And almost the know the battery as see our of business go the cooling deliver, us it the value I it, today, So create confidence both but the Dana so let's differentiates we're certainly sides, do in PT to cooling from us that on with long it that that call referring what's I

thanks. Okay,

Thanks Brian.

[Operator question Langan Colin Instructions]Your of with the line comes next Fargo. from Wells

question unique there? quarter-over-quarter margin. that? Great incremental dramatic the my Is thanks improvement here color high, seemed business, to take pretty Anything the driving sustainable? on Any in level Just off-highway the quite margin margins

year handling to starting that Yes, across a couple bit perspective, just indicated We're off-highway which Colin, and the see driving material our a growth. strong, deliver had a segments better other an From in always segments profile. we We've off-highway, a margin and that ag those been that lot better things. earlier of highlighted recovery include mining. really construction, was the of in

ends the that the in helping one up of So well as premium being the that impact that that's business. the of we're as some overshadow of drivers costs to commodities seeing

lot would strategically, talk, these there's a Any that remind some particularly color risk trucks the coming and on just vehicle Okay. in-sourcing are drivetrain on light sort And EV of on in-sourcing for And how on you light axle? out. about of drivetrain side trucks, see then offsets just the of vehicle what of the side, like parts the the light us things be? the of,

is Thanks you, question, for Colin. couple on this, but the just Jim. broader so A not audience. much the things of for for This

in-sourced I there's and mean, reality case, reminder, huge the doesn't as elastic that out a a just a business but Dana's to addressable the world. axles over a mean of it's years. for, Just not today it, are in for a good in majority market that XXX

point it. So that's starting a to

all to everything your to be we're more We're as and and in the passenger smaller we of full vehicle, question, that the if commercial markets, business, light providing this, markets always to said, I we're electrification everybody. more it in value full XX, and pull-through come vehicle light systems, vehicle to will be. electrification SUV, frame balance But the going we're etc, this talk relates be pull-through providing we're creation truck to always the for that's evolve. that in the sure. for As off-highway the And those expect that supposed started about in we don't We'll continue we've markets the for where to our totality, light certainly car, I try rest that vehicles when matter. say across market as will, September assured,

light customers Meaning full see the get value the they everything. stop still comes that a get Dana, mechanical, that full full vehicle full whole electric, proposition controls, software, full Our full they it's cyber, from same supplier. the thing, full

there's value have both expect we So XXX to creation sides, there a be participant and the we on years. big like for fully last

Okay thanks my for taking question.

Langan. Thanks

question next line will Instructions]Your Aileen come of from the [Operator Smith with Bank America. of

everyone Good First to semiconductor the morning related question shortage.

As of and different off-highway there pressures automakers vehicle dynamics from anything segments, structurally you shortage, underlying the is look your better business suppliers the being at businesses vehicle are been Power the in downtime light vehicles able avoid particularly the semis or alternatively, to versus and would less that's or to commercial lend semiconductor evade market rates, or that less intermittent itself those can machines rely you more Meaning light require and on so those plaguing take vehicle production perhaps businesses? business. Technologies complex businesses and less schedules on

hopefully Yes. I a a OEMs. more But supplier, the be right I vehicle Maybe question suppliers to pretend beyond to it question, have pretend. I question. would answer and to I answer like that this. for other to than don't be their mean, get It's good would skis a want but pretend the manufacturer. it's

It's have be the of how impact will companies really cover, all etc, various can't granular know, going detail. you any for to their -- there's them. you on I just that a But own get speak say I it an they'll to be that, it, they through solutions from that. in different and degrees So can as

it's just but you question, to can't direct So to answer direct I'm I participate. sorry, a feel where not I your that's give appropriate

think But have a core technologies then side on has body Historically for focusing market, like the or and battery little Okay. that as And on to for you unibody the plates, the EV you applicable these for ICE pick-up vehicle on truck bit as as win been business. body be cooling segment, market. competency and the frame about EV. clearly, product on cooling light portfolio frame compelling North continue your And can whether the American vehicles, In electrification architectures. winning the truck. well

when EV where still you're segment So new for the you about winning also and you seeing characterize other the across would segments? the progress your Or you're wins you having are and truck products, really right significant think customers planned as key to the with play? discussions have market

question. two -- answers I of you that kind Good provide There's would on two one.

go you'll to this your very you well, If but back you're remember very and on job, -- of top and sure. good

remember, GM, we you earlier area. probably this the optimum that could define you announced of the of As Ultium platform for presentation type in year, frame that full outside the

that's of think I it's so And you're -- right. representative example a how

second vehicle part spectrum the your side the of like Further is -- We commercial of and they participated your of the the business, just vehicle power have truck, end competencies, answer etc, the yes. present across other is question same not the technology the in off-highway, light capacity, in same full do frame but absolutely, capabilities, vehicles. markets, the opportunities the across

question. Okay, that thanks for hopeful great taking

you. Thank

Thanks Aileen

Joseph with Spak RBC comes line of [Operator from Capital. Instructions]Your next the question

on little some I of a is like stuff that. looks less seems sort you do of Like Thanks the of just because but this vehicle. actually XX% still back question, X%, by used to commercial question there. like to a impacted First steel headwinds, business segment going well And so like that's Brian's below much actually we're margin. recoveries bit this It steel know trending, mentioned

of the about just back them and you going margins what's those talk get to prior can to So there trajectory levels?

to the is Sure. commercial vehicle biggest Thanks constraint for investment the question, margins the Jonathan. Joe. In electrification. space, in the outsized It's

concentrated much the in making many of lot that we're very products these in for next of coming year. this the is a much segment to investments activity year and So this deliver are the and

say highlighted step-up in made think couple in earlier we the business. vehicle of overall year would that commercial the last about if it's that and the we disproportionately investment I So years, the we've in the

going we see for place -- a a that's that's So continue to where while.

phase more traditional in is going do the within that opportunity and more detail a digits to to to but see toward make margin systems, point of into and But are investment the at contribution for pull profile segment business catalyst products. as as the smart profile. bit we're that expansion, We long-term years, So start these small the of volumes kind a and now as having heavily higher which a margin -- and to we the more where this still the that in couple business. being see right we're approaching ramp investment those that that we come attractive going of Day, on at XX%, the increase business, do get believe margin electrification is and single gravitates delivering will this see margin up, a we're in we're volumes are the September back even software-controlled attractive to Investor the that here systems at on it than more But we relatively historical back.

to maybe up Thanks follow that. just on quickly

proxy? suggest markets investment? maybe and commercial vehicle between now a in at levels were if or? of margin the demand. a of of points that sort look end So would the couple Is basis where level back hundred Is similar of we delta these good years Or like which the years prior those

It's fair. that's to think I Yes, important remember. Yap. also

our our vehicle margins the business EV constrain did we component. higher of it line a recover investment down I and You on portions, most better meaningful heavy bit. top yes, still little bottom goes is the even as our in commodities. highlight, when the line But goes But have some up think does we recovery

how to Switch, you the about then we'll investment maybe some investment the And market? this much was? expect could hitting about talk second but of And maybe that when good more what start if that the question, in -- we product this is bit maybe Okay. backlog? should Electrification of sort into When at a segue do little the Day, to a EV your hear just more does

Yes.

the come that's color In be to investment, terms ones to quantum couple to done the something of space. that, compared on in of in going the more a consistent other that we've it's but

modest. but meaningful it's So relatively

some drive we're on going of them acquisition. excited. with we'll the inverters. partnering mentioned, our to the very capabilities portion a pretty to can electrified components, and really what they're on. They're We we It's Pi leverage right-hand of relates that motors Innovo's axle with broad perspective electronics that be other the them the a excited technology from the acquired in within of of featured In utilizes our it Jim the about electrodynamic going As range as side We're fleet. to software the technology use technology, products areas, bring control we and an page. that

to to that Switch right, future are on a you moving but bit and long-term say, taking into business. with Ashok into mobility we're, about get more in their needless this September, very the in detail partnership we're Leyland we're So excited going this of very

on that comment And can just revenues any -- that? when when start from

going to these A wins key a that We're greater out more come Yes. volumes to a bit lay of for on to we're in. going are when start lot to when with next. come together specificity the

appreciated. Thanks

problem no Jon. Sure thanks

[Operator the Kaye Instructions]Your of Oppenheimer. with comes from question line next Noah

Hi taking OEMs magnitude inflationary commercial so good calibrate XXXX waiting I for of their understand to have of vehicle partly question. these and their think morning my thinking just And the books. pressures they some of that in open been could kind XXXX I about the thanks duration order that's pricing.

I'm productive? those recovery improved get as -- conversations Do a costs of here getting that to these but chain there and Are higher pricing around customer you costs conversations, segment, we with on is, longer pass of what ability conversations your is are basically in time? how your metals commodities just the supply over the for just only into cost other year? not next So, all of period a setup at

I piece we're question. relative of through and how say Obviously, participating is pretty that. clear won't the to materials sides pretty, it both Good commodity get market end no we matter what but on rigid, in

the it's For about I things. customers related basis, the rest case-by-case different costs. a tell would on you, of with all all communication

look, success is industry. calls, our earnings course tell As A XXXX, pretty mobility this lived for critical that have base learned year, is the I've times through thing XXXX. of in healthy me overall the of customers we the the over one many on is, supply all said now

over has last to the continue the had. have decades. Industry we'll we've think partnerships of I couple So evolved

right the So can question now. best way answer that's I the

obviously that. of you and about see some We've to and started Appreciate other some can a indicators ABI favorable forward of talk Dodge around the life Okay. And signs then construction? little and in momentum bit buildings indicators.

Just compromise but to I legislation, thoughts what bill driver? your just then can on it's a of extent continued do that drive if piece you, obviously a ask infrastructure think you the as sequential in And improvement could potential moving off-highway?

And in you continued on indicators Noah, touched the think Yes. Jonathan. key is demand some I this category. of of this leading certainly

I the but now. construction right not desire to in our interesting vehicles customers, markets, only about they their more build of is across one think observations than all can the end segment

So situation up. the outpacing demand to is where chain see supply the to we capability continue of keep a

I we see end So to that's chain the that are indicators we're be end global longer markets. health markets, But in in this meet of hopeful to our the think you of overall that continue on good all we're improvement so some start extended that that likely supply many continue going across demand. touched we -- where and cycle a just points across great think our is to to a position we're we can of

around we're with your only certainly, I the States that that terms activity. second -- say world I of I'll would is it's And is just quite infrastructure in add United rampant just specific the us. build infrastructure the for but And part the know about question, it's talking not to that question of positive

leave I'll So there. at it

call thank the appreciate you. right All and

Kaye. Thanks

Wolfe comes of from question Lache line Rod with next the Research. Instructions]Your [Operator

phenomenon you are do you able was -- over I to be in contribution to more focusing small, the should Can given are impact magnitude would as everybody vehicles. initial to Or about indication that provide maybe that, you also meaningful investment ask light going business. going in that Hi segments And of in technology the electrification become be occur think some on? to vehicle? of LV, to just you makes CV more anticipating that the of phases also starts some the relatively electrification the that we commercial you're sense the from just it transfer

Rod. is for Thanks Jonathan. the question. an This excellent point, It's Yes.

So just things. a couple of

the you margin when but cost. we chain. effectively in the the good that see material and businesses think have high in our the longest CV space, We about supply record think chain, I demand, we've obviously to vehicle pressure of with disruptions one happens got supply be we the commercial challenges still have

going we're compared vehicle will dollars a off-highway meaningful incremental But highlight applied disproportionate the XXXX year an investment impact I the But that indicate is give talking early turn our commercial to margin a things Day couple Experience earlier how you because We're to to more bit were and example point we I of we on in developments we of interesting XXXX, trying the a when So pressures. be those at thought color EV them segment. compared to are the very the give tens think in are vehicle, of months. substantial. lot that a about the to out investment, of profile. the of Technology on of here did millions think would to being light But technology impact

will for in in lot be heavy-duty. the So some ready moving to of market vehicle commercial application Dana, certainly, medium-duty be core ramp moving we up is technology first now into product get that's and and as segments. to a engineering the the impact there fastest and investments, engineering But happens really which those happening

about yes, more do is investments the being up. businesses volumes because other expect moving really But have it's concentrated to one. in it point the CV fair I I to pick as really So make start the a to first think

that logistics in material that supply everyone or like various Thank challenges, recovery is the understandable signaling maybe of ordinarily Are get And you. start be you some on and mechanisms we some there's those next lag things you would a by see chain -- guys presumably raw should the to implemented and feeling incrementals better it's mechanism. facing these either point abate? of of or as then expecting start than year to

Yes.

on point. in that so fair that they're just are as so very we high many would some the a I The prices mean, measures abate. that's going we're pretty think being see anticipate I environment point we to at unique.

margin do, going business of quite a you're going push And they we business. it to more higher flows of not have are at potential Cash may the incrementals than the XX%. past, strong the help are the going We to to grow. think commodity As even that's the in levels right, level, we today. have to but is at reasonable really the still continue been that conviction exceed

getting going So help that indications business. demand should a stay strong which right while, of very in margin confidence the and to that the encouragement profile move is and direction of we're a to is there lot these really flow are in the all that longer cash just the going for run, overall cycle a the

give vehicle clarify, are What on opportunities? And Or light can anticipate recovering seeing EV point? magnitude side lastly, just you longer bidding at you is And the just that negotiated? this in us in like something of Okay. XXX%? the you maybe run, to just just a

we think four life, probably the period your I mean, is program range. think recovery, year in program, on that I would of to a during Yes. it to question is commodity of the the average way five say,

You're be build going and incremental to to fold at XXX%. to as over point, some new there's get move than that the less programs reality But commodity those in where prices you the recoveries are of to are. going will ability program,

was? piece. I'm sorry, run, have important we So effectively an I that. in that's think the second I recover And And longer ability yes, Rod, that to think piece the

can What looking what opportunities scale you -- magnitude at just the or this yes. -- the side? some bidding of give point us how -- of Just EV you’re should on

quarter. we see second would to I that in I pace the say continued think I record mean, Yes. a

incredibly increased So the and we were pace of activity But which high QX, the quoting responses of in levels in activity QX. thought were. they

across the it's interestingly, we're And highest it it's our So of all been. ever end seeing markets.

in and September. rate we're get So together that come to when we encouraged on we'll to the by on getting and can focus continue we that highest sign, really more win

forward. looking Great

you. Thank

Credit the from of come Dan will line Levy question final Instructions]Your [Operator with Suisse.

you. thank morning good Hi

First, to ask on light the just industry dynamics. wanted vehicle

in I America. think large inventory especially North some rebuild there's we know all very ahead,

So I margins incremental inventory related type we of side getting a different think as I bunch the I And play rebuild? there. in should there's somewhat we're question, out, a on that slightly starts Rod's that think expect vehicle pieces inventory to of rebuild approach. know What to as -- light moving

Yes.

that. we've I in a be they a the seen going year-over-year bit think, pretty what with higher past. consistent basis, than to they're Dan, Sequentially, on be may

we're much with things of We're to holding we're a the labor generally closer that a contribution profit would margin to people in think the expect But commodities, we more probably as light is speaking, shortage direct situation. than on is variable aside because challenged can. for of a range. that XX% One from contribution the of near-term kind in we vehicle, I flexing possibly re as normal pretty which

done obviously a Great software. acquisitions just of thank follow-up you'll then couple and of you EV at give capabilities to EV. boost more I'm a number your months. sure in your on in But day And you've and engineering a

maybe So certain your market light to apply I specific vehicle? to markets? across end in And specifically EV these are it end exposure? efforts to Or just understand, capabilities can want

don't It's capacity come a say, living, equipment the sell -- Jim. of I They markets, of vehicle, development, question. if Thanks. product vehicle thing. is off-highway capabilities, sell value our all control our as I for more commercial to vehicle it, At all for are interchangeable back etc, I day, but capacity, Because customers etc. with markets. could them. This etc. help recent that sell sell on organic absolutely where etc, type let's software often we've living. but putting across sell units, Pi those will capacity. vehicle, a piece the Take Innova go but you plenty organic light great end the as I parts The of control same we use, inorganic, think we've dependent for the been that, human a I unit take We'll of done you acquisition, it, create use well. I

vehicle whatever between I mean Board see off-highway PCB an a commercial difference a doesn't and the the vehicle yes, or that So case.

the And the So all electronics of interchangeable. is inverters, software, and integration and cooling. They're all battery we other vehicle complete course, motors, things for power and the tech, obvious the same cooling goes on the do.

for the question. thanks So

on didn't point the capability, the discussions side, on you past? And an entry maybe exist giving is that light vehicle that in

Well, for sure.

to point However, And to I'd entry That first gets start with. our we've you that table say been is value that partnered years. the a with customers our significant XXX for there's very electrification, called needs, get your can customer of sentiment, today's this is etc, pull-through, customer world your lost end which kind world your in understand long you need market etc. in still to

is OEM it seat us place men to voice what the your better to a customer, the of the frame gets duty Or because need ultimate as need? it what truck, as the take at consumer work vehicle, understand you salt, certainly, first that full So the table say, know what well. you you're relates consumer needs the the commercial really, of super in what if need? worth truck the customer. in a somebody voice does Or does But need you

at it table, trying figure you're know you're it, you really fake So now thing. or the to might out fact really, be, you if one going talk the whatever to -- But the it that OK, that's number that can software they're controls quick.

-- Which the up at inorganically. table you discussion. the the we ago. that because community others and doing seat now gets strategy, at Dana completely that our organically it engineering curve in to years five right So at really And was is the the have of four electrification both the is have and to we started across capability full there's

somebody So see a our are see certainly we maybe as, in of with think I But they they always sell it's I answer. vehicles. discussion for value create little that as because us long-winded know to customers them bit can us,

you. thank Great

Dan. Thanks

back concluding turn conference management now remarks. to Instructions]I'll for any [Operator over the

words overcoming now. I I think -- that all thank much in this job going thank a Dana. communication it the with we're my spectacular out and of and commitment incredible all right to we're have the through as which with never us. career worth about forward the their with. for that you in with challenges to as thanking we'll attendance We the Interesting personally, Dana dynamics Well, to forth. opportunity But dedication XX-year take think doing to for we're Together, there. picture seen for can September. calls you're the a today. look world on our times I'm few A dealing in dealing other associates you with around customers so and of always, be very thousand your CEO, know your I a

incremental front in of those. see market of the synergies which go picture to we're we how you participating try color you it's electrification, and in in to remember, but right As in of can that now, we're participate you end of not as vehicles the across some the all each and provide going one

two around. out to between there's three bridge our there didn't happen there been Are is, and think or synergies? and there that's by a similar I've question to you there there it been at I since least one of absolutely that asked vision, Though relative strategic as a accident. are another,

Thank execute So over last all you very we a and to just we're appreciate and your years. weekend. a that, the Have continuing great Have much. interest day. support great

meeting. today’s for all you participating Thank in

now may You disconnect.