Dana (DAN) 4 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to Dana Incorporated’s Second Quarter Financial Webcast and Conference Call. My name is Lisa, and I’ll be your conference facilitator. Please be advised that our meeting today, both the speakers’ remarks and Q&A session will be recorded for replay purposes. [Operator Instructions] There will be a question-and-answer period after the speakers’ remarks and we will take questions from the telephone only. [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. Mr. ahead go Please Barber.

and for everyone earnings our Lisa the call. us call today second thanks you, joining to on Thank quarter XXXX

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

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

Kamsickas, morning. Chief Jim, Financial Kraus, Chief are call Officer; Executive the this Timothy Officer. and morning this off Senior On President us Chairman and Vice start Jim will and

thank you today. for us Good morning and joining

quarter, for incremental Slide to a increase on Moving driven million totaling over our $X.X demand all end last $XX strong by $XXX of second X another including markets, billion, million in year, sales. our update quarter of customer sales robust EV the Dana and had

chain quarter And entire Tim the affecting detail in the go cash driving capital $XXX the are presentation. strong per free in inventory supply continued We effectively requirements share second sales adjusted to driven an prior lower financial volatile this later million, and finally, working fuel about for that commodity will While year share. demand earnings customer industry. schedules the us profitability diluted manage of impacted performance $X.XX increase disruptions per recovery the we inflation greater generated over because our ongoing were $XXX into our cost flow of customer receivables. million as and costs was growth demand quarter, the in mobility strong of record by

the right to the of Moving page. side

and today discuss we business the support lineup. a include we customer across share and will centering electrification highlight market we drivers, also areas duty key key and the will the end critical current product on heavy our an of our around market will Some upcoming our launches update vehicle of light update that some

driven Lastly, moment through received the over five have we questions to a to I the mobility growing conditions. an business turn electrification? will mobility topic Technologies requirements transform for market three by provide be serve factors. Page years take we you how Please on markets X, legacy The a we’ll prevailing walk meet regarding, to main Power we often to where the do continue past update

left on elevated but slide, side First, half remained in costs, steel first all of the the especially commodity the the of year.

most earlier year. more in America all is albeit last be back XX% for commodity in a This profit from And tailwind slight Lower look change North leaning be not detail our the past factor in cover this as the a actions with reaching other Scrap moderating of to the in increases, Steel, for the second key is in which of will down should peak as about positive situation forecast cost recovery timing. just this significant moments, lag recent from page. have a cost in we half middle in back is indicator made combined outlook, recovering as the headway the quarter. year is a a the the steel half Tim of a As prices after few input year. The importantly, with inflation, indexes the grade

drove COVID goods. in incremental sales, and fuel to delays such while supply costs our used to prices resulted We The China see continue material as to rising shutdown, and labor, transport operational not transportation for costs. energy,

base. year, is and benefit costs working to net will our across expected base commodity [ph] commercial our year, for path agreements, For XX% are to a outlook. be dollar elements customer see unlikely [well-worn] that and cost other included compared last we be latest are renewals, we'll the our in we the to for success inflation recoveries dollar but approximately recovering of of renegotiating contract capital. a communicated gaining with Unlike It to negotiated inflation continues forecast, this terms increases, in what be higher our the recovery costs having all this long-term the improving

basket to also In Thai the addition headwinds the foreign macro we're as rupee. dollar against the Indian currencies, from a of most to cost notably and translation strengthen continued facing inflation, euro, U.S. has currency the baht,

Our most exposure is euro. to impacted off-highway is most the heavily business as

words, right all the levels. patterns other less markets supply In is the production the vehicle demand to the and their in improving, OEM of Moving same production inventories impact at remain customer low of still becoming issues end and with continues customers in beginning while broader are is strong, customer our historically efficiency. negatively downtime and somewhat our order chains disrupt of our the OEM Many year page, compared frequent. the time stability to their experiencing of remain this

of vehicle the back the lifted, quarter. in lockdowns our the second of many in end been production customers However, operational the heavy dependent case upon expect the regions, our recent was COVID volatility have geographical the customers. continuing with production knockdowns and markets, most that far ramping make our China the specific year. is Such remainder markets and the is hence Since outlook customers, of current the has disrupted resolved, the end of to idled demand production from up and for during our remainder volatility mainly up year

would our three-year will light busy launch a to be XX It process I extremely the has you update programs launching $XXX vehicle balance of been we high sales spanning good programs. business well of our provide market. launches year in X, for ICE to traditional on and million Slide volume EV new to end XX-month as like an a Moving across continue essentially a technology span XX over backlog very includes Dana's power and of are globally our light as programs, locations. assembly vehicle as teams Dana

slide, As pickup cars successfully closely transition has the Range for high shielding, to are which as thermal independent with varying of new Rover leading talked Sport Europe, we the and a include being as global Birmingham, markets our industry see vehicle transitioning this acoustic to span in powered and and axles, truck some balance this protective and decades. front about ICE lines OEMs well you have and [ph] engines propulsion the performance, The Range UK the combustion Across driveshafts. drive light of markets major at the technologies will new U.S., The supported including or we've and in profile continued rates. again, number are time adopting vehicles business XXXX during example Investor gaskets, our we business early program Day products electric from internal Toyota [eventually] the passenger with of thermal enhance will is programs important SUVs. and management as the have electrified Starting sale of by our shown assembled launches communicated engine of rear and conventional, of slide many to in be as include coolers. soon core launched launch such Rover to on engine calls. thermal Tundra replacement our EV In or top and popular and recent worked Dana's that Dana in management featuring class powertrains

enthusiasts. Bronco Raptor anticipated highly Ford's row, big bottom a be should is the the off-road to among Moving track and on seller

long have end relationship axle consumer. for vehicle, storied unique axle leverages rigid shaft, design, Dana's and deliver off-road on which independent front the prop this We a beam iconic with experience and to

also report truck Duty well. underway that Super are well to We pleased is preparation and Ford going refreshed

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products presence can global where real is we because advantage world. in our for Dana the Our produce customers are anywhere a

hours hydrogen package. emissions. have the in in a Dana a utilize dual thermal delivers at while Texas. or charging largest as that Recently, news XX will about on of moving I company and in fuel performance Moving truck electric manufactured in Walmart e-Transmission, up hydrogen of be which motor in capabilities infrastructure the electric to operating news United addition high be time all-new to terminal the expected test heavy Longview, to greater efficiency, in their faster soon. forklifts support the to partnership truck truck featuring some will to the It commitment Walmart referred yard time sustainability. in yard superior and share and can to grid. electric the to the States truck help compact exciting will no generation to Dana single truck with Hyster-Yale electric capacity same refuel single from hydrogen less a X, second This comes tractor to features its as a maker about performance a freight that first on will world's It's the retailer the shared cell the or often design little dependence Slide e-Transmission producing refuel also

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CFO, us walk Now, Tim go I'd Dana's like who financials. Kraus, to the will Please ahead, hand through to it over Tim.

and of Please due across costs, than more all results, last impacts. being and the volatile margin benefit last Slide Slide partially Jim. compared higher Please for drivers change last recovery last more of second than transportation, EBITDA margin profit sales you, second driven quarter. flow earnings. billion, patterns. adjusted the The compared labor, profit materials, XX our second by slightly to markets to of cash end for points period compression XX, than than operational Net sales income with year's of requirements and quarter lower from energy, second at attributable that's lower second million mainly lower was now costs, the currency to driven quarter in compared closer capital of supply the $XXX million, lower free $XX the the year. the to Dana $XXX free inefficiencies higher was XXXX. X.X% million inflationary the offset commodity due XXX generated capital $X for raw offsetting Sales operating our by a the demand This million quarter were to and was demand this a quarter, year's in cash X.X quarter, EBITDA, interest higher to in Thank second turn by $XXX basis year, working and We year. and including of XXXX $XX spending. was resulting same was with continued to use higher look million quarter million me by offset flow turn of Adjusted stronger for

organic of by million, growth our sales traditional driven was The driver demand in higher each first of $XXX segments.

a profit, inefficiencies the suppliers, primarily was from higher chain cost XXX the headwind lower a organic change million However, points. savings cost from adjusted our basis customers' inflation, of production organic driven by of input which volatility supply EBITDA $XX $XX total and This in and operational schedules. driven was loss of on was loss sales million, margin

$XX year. product EV last million sales Second, the grew by over same period

margin to the basis the quarter, drove continued expand XX headwind these a $X sales are engineering input commercialize profitable, contribution new second EV cost reduction While inflation in of technologies incremental investment and and million a in points. in

significant the as is also points highway profit in off $XXX but the dollar in higher business. our sales currency Principally against largest a foreign and our exposure XX a and currencies. increase euro, baht headwind margin foreign by was This margin nearly drove of in impact reduced rupee. Third, million slight the basis translation value U.S. as

rise the primarily Finally, this in steel Gross were higher second commodity costs XXXX. million costs, compared $XXX continued quarter, in quarter. to material year's to a

Slide recovery net higher approximately through of to on commodity quarter from costs inflation for recoveries pricing. of XX free resulted function mechanisms million detail of higher we Our and our continue flow but our for compression. me profit increases $X and XXXX. well with to our commodity margin in rising headwind, The recovering cash points XX just impact turn Please cost basis customers second are XX% a

As to and and indicated the second lower earlier, as Please the interest significant of this in free previous outlined due actively quarter our this most Slightly free we was was profit outlook are year. over of market XX receivables. we capital several the a our Accordingly, – we guidance. spending resulting notably generate U.S. you for our that year, year. lower timing our new working Working debt $XX cash payments, $XXX changes $XXX to which have than Slide our which flow higher source substantial the focused second including $XXX strength quarter, even interest of EBITDA. a cash remainder a from refinancing capital In to investment of was an million actions the been There quarter, million updating improvement down year, are Jim inflation with million business, turn XXXX expect we of financial cost this to earlier capital last taken of due updated was cadence flow requirements year, generated to million, higher the business. Net the adjusted of Electrification management higher due this full-year dollar. $XXX quarter continued and now million environment progresses. our last managed on for with inventories in launch year

While we're the and demand EV range. expected pressures, is our prior to guidance seeing higher now billion, midpoint products. offset remains midpoint which be currency the and by cost primarily recoveries the at million page pressures, sales higher of million our of to range, for headwinds outlook $XXX of our cost drivers right demand about $XXX lower from additional unchanged expected of strong about million guidance $XX.X at are is EBITDA and at remains for cost by to for listed the Due adjusted $XXX to our due guidance, product be our Page XX. three

on $XXX the inflation higher inefficiencies million, launch remainder in investment due net sales profit that's to the our business. further higher organic net as higher as due and well of down were to and about costs, quarter a supply with customer First, chain business EV in about

patterns Our of previous likely the that guidance had We would half. these the for ease continue remainder back to anticipated the customer believe now year. headwinds supply are and disruptions in order

year. a costs, of products million growth, additional an profit through so of the in I'll Please impact XX, of expected EPS foreign full-year Adjusted from expected for additional of to falling, with includes now transportation. X.X%. organic now X% Beginning mentioned, of impact change and commodities sales. be the with a in the recoveries. higher of to where a is adjusted energy prices growth, with margin to $XX to organic margin Second, Jim and sales is due the new sales lastly, expected expect a EBITDA earnings. business, traditional approximately the to Implied adjusted Included changes $X.XX expected be estimate midpoint profit EBITDA expected and we million be commodities. Free per including element from at X.X% X.X% million. loss our benefit to Slide the labor, $XX turn now me $XXX currency is of Diluted range revised be be as revised flow $XX lower combination translation to of cash on last is now highlight to share million. in market And will about is sales inflationary about the drivers are

supply inflationary normal primary million, and the from will recoveries, these estimate. customer suppliers, Inflation, that increases net lower from profit than organic estimating costs $XX now previous $XXX the lower cost disruption, of about higher are savings total sales. order are million launch than flow cost drivers our through We of patterns,

headwind of due full-year of several of our over the up comparison, million, value last driven run by to about the commodity in additional quarters. costs However, higher there sale inventory, is $XX the an

[indiscernible]. levels commodity about goods higher $XX As expensive EBITDA million fall valuations in our will inventory headwind loss expect will EV are expect to incremental $XXX about to product more of from commercialization, Due inventory to million we decrease, investment sales as prices this $XX required development the and and the normal added inventory return shipped be than now the previous year, EV and for estimate. We an million.

headwind of Next, anticipate by of be translation impact primarily with we impact margin currency weaker driven million. the million sales. headwind to additional This $XX euro of a $XXX now is approximately a to a foreign

driven levels turn look XX balance by This still below to year-over-year range. to are our year. improvement an previous over but and of please estimate, being midpoint steel commodity higher lower and we result million. inventory And to lower recovering $XXX is a terms on free slightly brief current profit negotiate flow as for a outlook better while cash manage our our anticipate due the $XXX other free XX liquidity. of compared in for improvement cash prices flow from $XXX with in that with aligned We XX to million, working full-year form million million The our turn earnings, will at to conditions. Please tailwind actively selling sheet Slide at guidance a XXXX. for me of commodities about Page the be is outlook for We anticipate prices, lower market requirements about last our Finally, and capital customers improve. about continues net to finally, of

strong On we of the quarter, the this business you can of approximately second maintained page, left the see end US$X.X side challenging billion liquidity. of the had throughout have liquidity that we At environment.

We available maturity our of side three-fourth are approximately of on debt mix illustrated profile page. borrowings. the maintaining a and one-fourth right of liquidity The is cash the

position a no We few have the are maturities we very meaningful debt years. as desirable in for next

Our generation robust turn and balanced and foundation over to we questions. this and cash liquidity, solid long-term navigate free business to flow in profile, an current I'll debt a for to to our further now provides morning, maturity listening transform compete the like the thank as take all you and headwinds electrified call future. your I'd Lisa of

Paribas. Thank question Picariello our We'll from James take BNP Instructions] you. first with [Operator

good Hey, morning, guys.

earnings the XXX prior guidance. the within guidance decline the core in EBITDA on Just million the versus bridge,

that is essentially is right? XX million XX know comprises driven to by million XX of that Yes, the be really difference. know attributes prior what great. XX We net just cost difference, there million The what's we inflation that color operational million the electrification. the So, additional your would efficiencies? another versus Is outlook, any

supply number higher costs in and by sure. production a Yes, operational couple as well being inefficiencies things. driven chain patterns. both are customer of that additional Obviously, Yes, that by are inflationary as too, the

Okay.

of net in inflation versus just there cost maybe What a Like, is bucket – So, captured maybe then million? the be what would then. this captured separate new XXX bucket? clarification

to not things and amount demand due energy through labor, supply those cost driven in of number, – just be coming for and inflationary the represents are would net a are the the base them. customer that patterns, which that are to that XXX contribution. general these transportation, the being chain just related costs incurred, affected the Well, The so million like inefficiencies the costs is

And year, to got think just, think for net as you're then as XXX the million about bridge understood. inflation. we not this going in you've next obviously, earnings year, cost guidance, next Okay, but about provide we

number in what partially of have You guidance addressed efficiencies now million year? be a and for that's just the for versus the XX additional just in sustains probably this terms costs for of really the the What of are also the recovered the year portion bigger next could or million full-year is change operational temporary for and XX inefficiencies. these net next

demand Obviously, the have of costs by we supply a have. erratic lot patterns and that been driven the

So, we're impacts abate to for order need in of a come some system. in the out the have to those of cost

continue teams recoveries In inflationary, commercial customer and work provide work with to the to the on customers terms of we with to those. the the core

those are obviously So, of process these that and we're costs ongoing a terms or it's not obviously are recovery. contractual in – are given that typical long

So, we we as the working be to successful go that in we'll to believe able with be do some through customer costs. these offset of

Appreciate the color. Okay. Thanks

Sure.

We'll from next question Lache Rod with our take Wolfe Research.

morning, Good everybody.

do and James' on year, of some highway the I'm are are, first leading something could indicators, was the as those off reversing typical, recession, risk chain for longer other there wouldn't up we secondly, wondering volume. see that that commercial if to you much just of indicators light color be production and the then impact characterizing shape up? starting see how see And vehicle or give a that but sort patterns and that if of I time could us following Just large, vehicle as wouldn't see transitory. is hoping to And supply maybe lease from that XXXX question, consensus it is leading things affect this as that there just as all you production sound on this factors it is but kinds you actually building the you're well? those in you and

one Sure. Ryan, can I'll answer your the then take first Jim and the second question. part of

demand, back watching would be for of we way to that's the year. by vehicles productivity begin would perhaps left start XXXX as really compensation the and to by out next think but what driven offsets customers we with erratic be see they're driven are days. really that this financial next give year, that's going we for [ph] of very of it driven to of preparations our impacts closely abate planning offset customer we've Obviously, coming inefficiencies got we'll chain. On [obtain] five the months that or our the then the We the the out the to and and we're supply in generally working building by that for customer some of seeing some both these that

is And Rod, Jim. this

your Just on question. second

relates to indications what than off and are markets going light is we just of all mean into – I that our highway. others more As I to customer every saying that think stick. the down there's one this it out every vehicle, across truly that it there is single have vehicle, ours commercial demand still We, we demand, break

As you all inventory to agriculture material significant lack of And due it in person, [amount to of them pulling the we and [ph] field. break and is the every construction know, into a still others. one of man] handling

So, on we I lot into have of obviously, about recession some mean, year. are the impact it a could that, there there that vehicles demand. the good out going feel but in is

our challenge late that. in schedule feel mix what us good and The So, for of about pretty just across is, to, markets. late, kind changes alluded change minute the Tim

year the we be the would calm we're believe earlier So, to calling anything And I've the back going back half that's like not for seen down, never year first that like it. the this but of that thought of it in for like to half I start half. to

you. Thank

next question We'll Deutsche Rosner with Bank. our take from Emmanuel

much. Thank very you

better. in a to understand guess, Just the wanted trying bit change and little guidance follow-up again on the, to it I

had bucket if or versus maybe quarter tailwind think this your million the like million ago, versus compare quarter so XX EBITDA I headwind expected, would a I looks organic walk, you what walk XX a a be traditional before. So,

XX. about only gotten about expectation but by $XXX by So, maybe worse million, obviously the inflation worse has

it, $XXX that Is describe it organic I would how factors, volatility million that from in labor, traditional So ex-inflation [worse] you schedules? just expectation? production the Is of like where, guess rest [ph] it?

yes, base so Well, inflationary – base we've increase got so the we've cost. got in increased an

additional that minute from last it's really changeover than of we're changing stranded would point that Europe the really EV. inefficiencies all the the customers costs other our build, that's to acute investment going demand what the it So, energy, it, the versus can that in what they comes to breakdown the dramatically be rest more they they're Obviously, they that's patterns. by buckets rest quite in due go in. in the change building the conversion gotten seeing. the what want of When then we really to that originally to when inorganic. costs varies it is And plant it of There's in a out the from in where what changes, of piece and see balance is labor, places schedule. driven unfortunately, labor the really The you they're

and but mix. that's pretty amounts And on of to run our variability, – product Most of impact large in a products the so plants efficiently. of the sorry, large ability effectively having amounts have dramatic our

So, it has an acute impact.

Yes.

Okay.

first second you takes directional and I'm can you're puts for for midpoint half. The half with at Now, help a the walk. half understand some basically to us that the stuff trying EBITDA to second

did the versus in Your first implied revenues guidance half. the probably about that you is flat

but half, quite bit second to half higher. first revenues a stable EBITDA is essentially implicitly So, guided

So, know second I half at better, line? half guess you bottom gets the first what to

there's of built So, there. I in a think things couple

we'll We've Customer that's the pick the to we expect down. recoveries, improvements inventory coming continue the versus going then back half in headwinds in half to the back we additional year the of the half. the be – be additional strong. back got get some to or And be of able do to year. in in the think first additional with plants So, up

schedules? terms the predictability mean production In you of in of stability plans, and

and us to Well, recoveries And our driver cope big of is well. Right. little up amount being other able cost bit the the more. think a them should going be that Correct. then as I with

or those? non-materials what inflation for are are These

commodity and recovery, material with So pricing well as other material some the customers. as both both

Okay. Thank much. you very

Colin from with comes question next Our Langan Wells Fargo.

Great. taking question. Thanks my for

Just a little clarification.

I Can think mentioned talk million is the is first you a occurred that about been that just and like half half? of an a inventory. bit XX then mark-to-market coming inventory of second in in or already that the you impact

it that in first in we and of year. balance half, the principally of come inventories some the back the occurred half the saw as is the quarter we've So, of in second down,

an of that And half, color, kind walk? when any is impact, look half first equal second we at that

as based top flow know inventory my don't through it probably head mean, off quarter, we balanced. by it'll the I hand I saw, factors. to have we by you bring on Yeah. but of those down obviously down, cost and it's two continue commodity

And prices the lower? lower market material raw this? what's the causing It's just causing or

Yes.

what of and particularly this right? we're material buying, larger dramatic the inventory. us At in of of on the very short hasn't selling large increase much we increase a we about over a Those value caused caused think it two been built you putting had change actually large this inventory, a high time. out have to historically So, time, cost balance both issue, probably a the So, period because mostly same material the we're of that is combined inventory. as things as sheet costs right we're very commodity the amount

around and in drive inventory year much you the inventory prior management, higher from us That selling conversion is that all this on the Now, move as teams turn EBITDA higher inventory to year, say cost efficient profit and through periods. was than last through. as we're out more or flowing you headwind operations where much it getting this

so, come continue down. inventory we're and seeing for you two when commodity to of seeing wouldn't down XXXX move we're anticipate One, we're we coming two, holding of costs the this factors. And out amount

all? don't you customers recovery for value, the And from mark-to-market get inventory your the at

recoveries, if look line? as Well, – million in that like be $XXX – it’s of sitting that part sitting so you the just would our in that of recovery at year-over-year the

you that year? cadence Okay. can how I And mean, us just the then through the does inflationary remind of XXX cost?

about two. I in the quarter correctly, those so XX and in XX second, million think if first had we remember million the I So,

math So, little the about my – half back in than front the a is the year, if it's half higher of it's correct?

Okay. getting So, number? recoveries? I would stronger that are It net And of it incrementals half. thought a mean, you, those include… How of but EBITDA? your I how the flattish on growing sales some sort you isn't was so get second do in

So, it's recoveries and then the efficiencies we should be driving plant. into the

Thanks right. taking question. All for Okay. my

our question Kaye Noah Oppenheimer. take with We'll next from

questions. the a Actually, taking to for frame question want for strategic just Thanks you. I

this appreciation and of on profitability operating relative prior the mean the segments challenging times core peers. environment. significantly full across just key markets strategy. could and the hard parts those business referenced in has is doing across clearly I said developments been wins expectations a element it It competencies core end the think leveraging portfolio of be the to product work there leveraging in the growth I of seems company multiple and that are underperforming like multiple you to today

the do response? these business? need you you a strategic take results question is, to the to of as these And what do warranting you and do see so, more structural I mean, view comprehensive raise the profitability transitory, really if not, actions

the right, it Jim. of is Thinking light for and segment light content per with nibbled all more of them Thanks and a Technologies lot at transformation kind referring other of talking about the things two which and Power a but with online, vehicle Technologies about all think When take and the in edge is coming of cooling of is is first just contribute light the you're vehicle today, businesses, to well. This the associated it. it, of in driveline profit the significantly just higher vehicle is we the which which elements business course battery it, the largely about associated that's most Power amount question. obviously as you let's and will pieces of vehicle key business, the the the just

about. as on to want you does program a whatever up in [indiscernible] the really know clock and anybody – can't speed the there programs, the we that I will journey you as or just as those lightning we're start to else just well good think roll or to talk

will those come together. So,

this the we those program happenstance large the ICE put end with vehicle more other it on in back is programs no all – the long then market. our of nature want. in similar talked to unit that supporting unit, comment, to benefit from capability side, they're a the more our tooth are of And wasn't or supporting kind another to accident consideration, overarching will you come, that vehicle the having of business business there's we light mean, where start but the with business huge one there's about, on by and meaning light relates I side what business as things, they supporting it customers, get driveline refreshing the the come. you'd and a to roll to As the validation to there's scale credibility testing, I'll portion call communication, And and supporting benefit and with your matter open benefit our tell people refresh to the competency everything's we I and the for way,

mean, we together say tell the we'll never relative to referred doing. and I I and macro these to mean, disruptor business might segments, things I just time consider be is the same line the the would of but never today, conditions. the longtime building come you can't on but benefits still clock be a It's ensuring said, plan future as they'll, What working spot speed together, doing we're that we're the So, up right the think crazy that it's and there's like at I certainly for things. it's reap unfortunate things for a comes come we're tough I us. infrastructure trying anything confident two We're to the from two trying through it. a and I very I'm drive winner, you the a to together, is about yes, – because

thought, appreciate Jim. the Really response, you. full Thank

Joseph last RBC the question And will be Spak Capital with from Markets.

at, to going here here. the shot go forward I'm everyone. Thanks, of take sort try another to

[ph]. billion your when Day, you EBITDA Analyst in were of you for XXXX, [XXXX] had $X.X basically late calling in So,

get to you know off wondering [ph]? but what reverses I sound XXXX, [X.X or you, does sort billion XXX I'm maybe million about is, think right that you billion] think versus a comes what recoveries, is XXX unless base guess better investment, million, what's at at that inflation, to could new some we just of looks laid the you think the so inflation are like of closer higher and inefficiencies we right So, is out is sort million, here, there's least It XX like transient. about changed another EV currency argue

you draw on conclusion, the make guess We're to really not at kind call XXXX this of a point. I can in Yes. position a Joe.

So…

would guess, the we difficult – the more if mean, more stranded additional – mean you, about XXX I potentially of is labor, versus that it I if schedules where seem more work more to could and trends steady, do the be recover those it able get you'd to what there – right? seems be talked stuff sort you bucket recover million. But are inefficiencies structural, just in Okay. I right? like into like know that because

the think buckets No, the correct thinking guess. perhaps are I transitory, Yes. in transitory versus you're more or a less that from ones it I about

us you sense recoveries, in On which the seems to little year, for makes bit like XXX% date, more would to it what right? it's off exposure. light are of if you more about been like sense, the you're segments and – that math recoveries to to it can but that like up in a sort talking for you have stronger get that our to give Okay. other segment of recoveries seem vehicle commercial better is it because – highway Is the date to, relative two a for vehicle those by or year, correct, year have have got also start

largest the I have amount but is also That's we mean, those correct. it's lagged. significantly are segments where the contractual, that

to later we'll starting benefit in look abate those they'll in being are And be that begin and so, to lag seeing the segments of to starting to the through as start recovered. year, help commodities other the over flow

Okay.

commercial it's real vehicle? in vehicle that than off light time say to recoveries there's So – been but going fair in highway more

That's correct. that’s fair. Yes,

for one Last Okay. me.

– ship Just you starts guess an producing product about and those? can Duty the And related, I the of talked make Super the do just on Duty, for do quarter new fourth products you for like when launch, making program those Ford Super to Super you actually you Duty? the important – when stop obviously and ahead the have outgoing the

of be in complete everyone's Good the first of answer not, launch a there migration. kind end but my out little a other – markets This to you're on bit don't and a, every all, or this any matter, there different. [indiscernible], Yes. don't Light question. Vehicle of will that one, There's for

definitely the year, still launch and be end of us. required early on so to the supply product Towards from so this forth be some vehicles will the old of starting and we'll

or we from – As don't that know I the will have when whatever to full the of it right together. time. in March that's new that I front product, volume start migrate of it point, to sort don't that first quarter in me get a if we'll is, January where of that's flip over And forward, it from at how is, obviously that comes

I the other – then you like those other separate or sort from – guess, and convert are, and line capacity? some one over for you, the existing that up lines of to two And time then frees

of confusing in Not at, a that. both, of all kind combination to depends it it make

for product product the that transition capabilities, can things. sorts Some design, old from the on new you them directly dependent would product all product. one, to the of some lines others We new have of different

into could transition there kind the free a transition to yes. do the answer point combination Yes. we So, that those new capacity is program? can though, of last of next And up when then your both. The we

Okay. Thanks so much.

reengineering across to of have capability also the replacement have pressures. engineering The coming of full leveraging product growth the end related that mobility and doing which in-house the existing stronger. team, business of unique we've new Okay. high business through done supply at job the programs market of chain, to is future navigating and I possess macro Candidly, volume it largely the Dana been manufacturing, barrage launch question. while dynamics we're pan purchasing, all me markets They're position the companies a last integrated that unprecedented overcoming the obviously, cost summarize been the operations in Dana them. complex program remarkable and a very waving saying course through as and Dana issues the secures we e-Propulsion never electrification has it's would just operationally, the acquired with, four-in-one are decade. systems, complete or business, launching We're we're

a for you and efforts bit now, disruptive can choppy Our that to for these I in to Dana very done position we programs, electrification get and integrate right tell future be programs is our to come. ICE strong continue for continue as backlog, the roll new we've the growth going investment to intentional little the we're new sure we to but the years as

So, you and much soon. today and for talk attendance thanks we'll to very your time

participation, you and for your conclude may today's now does that you And presentation. disconnect. Thank