Linamar Corporation

start is always a key reminder of the value drivers that make Linnemar such a great investment and how they played out this past year. First, Linnemar has a long track record of consistent, sustainable results that drive out of our diverse business. And Q1 is just another great example of that, with exceptional earnings growth in our mobility business, more than offsetting soft markets across the board, as well as other dynamics like tariffs in our industrial business. Being invested in both businesses helps trim those big swings up and down in individual markets and leaves us with a more consistent, sustainable level of performance. The second key point is our flexibility to mitigate risk. As you all know, our equipment is programmable. It's flexible. It can be used on a large variety of types of equipment across different vehicle platforms. It takes propulsion in the mobility side, for instance. So this flexibility allows us to reallocate equipment from programs running under capacity to new launches, which, again, is a big part of helping to keep our capital bills billed down, as you saw, again, this quarter. Third, we've always run a prudent conservative balance sheet. We target keeping net debt to EBITDA under 1.5 times. And in Q1, you certainly saw that. Net debt to EBITDA is 0.6, despite some significant investments. CapEx for new programs and acquisitions over the last year. Our peers were definitely much more heavily indebted with Netcat to EBITDA more than two and a half times. I think this really creates financial stress for them and risk in terms of soft markets and limits their flexibility to chase new business, which of course we are not restricted in the same way. And I think that gives us a big advantage. Lastly, returning cash to shareholders is a key value creation driver at Linamar as well. You saw that playing out this quarter with our continued repurchase of shares in the market, which we have been steadily doing since November of 2024. Okay, turning to highlights for Q1, I would say it's been an excellent, record-breaking quarter that well represented Linamar as the entrepreneurial, opportunistic, and technology-driven sector. business that we are that's really delivering growth both for today and for tomorrow. We saw record sales and earnings in the quarter for our overall business and our mobility business specifically, despite every market being down and a world that's really devolved into a minefield of tariffs and volatility. Our mobility business saw earnings growth of nearly 50%, driving partially out of acquisitions but also launches in our global operations. We saw great success in growing our technology portfolio with another strategically important acquisition of winning BLWs, REMSIDE, and Prenspers facilities. Through these acquisitions, Lindemeyer significantly expanded forging expertise to include warm forging, expanding our already significant offering precision gear to include precision bevel and helical gears for both the light vehicle and commercial vehicle market. Having more products and processes to sell, notably proprietary technologies that our customers are looking for, really expands the pathways of growth potential for us at Linamar. Another key highlight for me as a reporter is the excellent level of new business lens Also, by the way, at record-setting levels for our first quarter. And finally, we're managing that tariff blind field very well indeed, with actually more than 90% of our sales at Lindemar not impacted by tariffs. I'm going to review the tariff situation in a little more detail in a minute. So turning to the numbers, we saw sales at $2.9 billion, up 16.1% over last year. Sales were up 6% in our industrial business as the access markets start to recover, offset by continued softness on the ag side. And sales were up 19.2% in the mobility segment, thanks to our Aludine and Leipzig acquisitions, as well as launching business, offsetting those soft markets globally on the light vehicle side. Normalized net earnings were $195.8 million. or 6.7% of sales, up 17.1% over last year. Normalized EPS was $3.28, up 18.8% over last year on the back of a very strong mobility segment performance. And finally, free cash flow was excellent at nearly $220 million, unusual for Q1, which often has negative cash flow. Strong cash flow drove from those strong earnings, and a continued focus on reallocating capital to control our capital spending. I would summarize our results this quarter as being most impacted by launches and strong production sales and mobility, the Alunan and Leipzig expositions, growth in skyjack sales, which was offset by negative impact of FX, the majority related to a weaker U.S. dollar in comparison to the Canadian dollar in the peso, as well as weak agricultural markets. Okay, let's have a look at an update on the tariff side. As mentioned a moment ago, more than 90% of our sales are not impacted by any tariffs. I think that is the most important takeaway for you on tariffs. And that does include the new 232 tariff scheme that came into effect April 1st on metal product derivatives. So that's is creating a bigger impact to certain products in our industrial business than the prior scheme of Q3-2. Obviously, 25% tariffs on full equipment value compared to 50% on only non-US metals is quite different. But the good news is the tariffs are only impacting select products in the industrial segment and not impacting the auto side of the business at all. The impact on the sales that are subject to these tariffs is, of course, it's detracting from our growth this year, but in no way wiping it out, given its impact on a smaller percentage of our sales. We fully expect to grow earnings this year, as Dale will shortly outline for you in our outlook. Meanwhile, we're working on various mitigation strategies to minimize the impact of the tariff. And, you know, I think this is another great example of the benefit of a diverse business. When all your eggs are in one basket, you are more vulnerable to specific dynamics in that industry. When you've got multiple revenue streams, those same dynamics are not impacting all areas of your business and also have, of course, differing economic cycles. All of that helps to ensure that more consistent, sustainable level of growth as you have seen us deliver quarter after quarter and year after year. Now, on the positive side, we are continuing to see customers looking at onshoring into North America parts and systems that they're currently buying from Asia or Europe. We're building up a significant list of new business opportunities and, of course, new business wins for our North American plants in all of Canada, the U.S., and Mexico. New business win and quoting activity is quite strong in all regions. We're seeing great opportunities for our U.S. plants, particularly our newest acquisition, Aludine, but also for our other existing American facilities. U.S. new business wins are already at 60% of the total that was won in 2025, and we're only 25% into the year. We are likewise seeing continued very strong new business wins for our Canadian plants, continuing the momentum after a really strong year last year. In our first quarter, we won quite a significant amount of new business for our Canadian plants. In fact, more than 70% of the value of the full year of new business wins last year for the Canadian plants, which in itself was the highest level of business wins we've seen in the last three years. And again, we're only 25% through the year. Our strong, highly capable Canadian plants are punching way above their weight in terms of wins compared to their slice of the global footprint, which is great to see. I think it's key to note as well that our portfolio expansion, notably into additional structural components, is really increasing our RFQ activity. This strategy has really played out positively for us. The tariff situation is also adding stress to an already stressed supply base, notably in the US and in Europe. This is leading to acquisition opportunities for us, as you've seen us act on. and the pipeline of distressed companies just continues to grow. We've so far completed three distressed acquisitions over the last three or four years, significantly adding to our technology portfolio as well as our global footprint and for very reasonable costs. Finally, I wanted to emphasize again that our strong results and positive output is very much a result of what I think is an excellent and unique business culture at Linnemark. Our culture has been fine-tuned over the last 60 years to be opportunistic, to be entrepreneurial, to find something positive and actionable to grow our business regardless of the circumstances. We are naturally responsive, nimble, move fast, we're innovative and creative, and mitigate challenging situations, and we get things done. I think those are critical elements to not just survive, but thrive in a challenging time like we are living in right now. With that, I'm going to turn it over to our CEO, Jim Gerald, to review industry and operations updates in more detail. Great.

Thanks, Linda, and great to be with everyone listening tonight. As we step back and reflect on Q1, this was clearly a quarter of records for Linamar, and more importantly, it was a record quarter that reinforces the strength and durability of our strategy. We delivered record quarterly sales, record quarterly earnings per share, and record levels of new business wins. for a first quarter since 2014. These records were not driven by a single market or a short-term tailwind. They were the outcome of consistent execution across a diversified global platform. What stands out is how this performance was achieved. It came in a very complex market environment with varied volumes and regions and markets alongside ongoing trade uncertainty, and cost pressures that speaks directly to the resilience of our operating model and the discipline embedded across our teams. Across the organization, we continue to see the benefits of scale, commercial discipline, and operational focus translating into sustained earnings momentum and strong cash generation. At the same time, continued success in winning new business reinforces the relevance of our technology footprint and long-term customer partnerships. Equally important, our approach to capital remains deliberate and balanced. We're returning cash to shareholders, reinvesting organically, and preserving balance sheet strength and flexibility. That balance is critical as we navigate the current environment and position the company for future opportunities. All of this ties back to grit, growth in revenue, and income, and our team. This quarter of records is not the objective, it is the result. It reflects how we run the business day-to-day and how we continue to position Linamar for sustainable long-term value creation. So speaking of grit, I want to turn to the large issue everyone is greatly focused on, which is the new 232 tariffs announced by the U.S. administration just over a month ago. Linda has already outlined what these tariffs are and their high-level implications. Yes, there's significant issue for us, and we are not taking it lightly. From the moment these measures were announced, our teams have been working actively daily to identify and implement mitigation actions wherever possible. The current impact is concentrated on the industrial side of our business and spans a range of products, HS codes, derivatives, and component parts. While we're not going to outline specific products or classifications publicly, this protects our commercial relationships with customers, supplier governments, and all stakeholders. This exposure is being actively and deliberately managed. As you can see, we have taken a multi-lever mitigation approach. includes regulatory and classification reviews, distribution and structural optimization, targeted operational actions using our existing footprint, supply chain and cost initiatives, and disciplined commercial actions. Some measures are already in place, others are actively underway, and additional options remain under evaluation as we continue to manage this to protect the long-term value. As Linda said, Dale will walk through this in our outlook Again, this is not a static situation. We'll continue to improve as our clarity improves on this. Okay, with that, let's take a look at skyjack business, and what a great quarter here. Despite the current headwind stemming from the Section 232 amendments we just spoke about, skyjack weathered the storm and saw volume increases by 66% over Q1-25. This incredible performance by our skyjack team was driven by scissors in North America, and booms in both North America and Asia Pacific. Looking at industry expectations for 26, North America is expected to be slightly up 1.4. Europe is expected to be modest increase of one in Asia, and rest of the world expected to see a steeper decline of 17% on the backdrop of tariff wars, leading to a global decline overall of 4% approximately. That being said, we're expecting that 27 will see a slight increase across all regions, primarily in North America, and the continued growth in data center construction, where Skyjack has created the optimal product to service these type of products. As I mentioned last quarter, it's important to note that volume growth doesn't always equate directly to revenue, as product mix plays a key role, with booths and telehandlers commanding a higher price than scissors. The real story is SkyJax's ability to gain share and strengthen its position in a challenging market. On the innovation side, we're very excited to say that our new SJ3232E launched in Q1, adding a versatile range of electric slab scissors in North American and European markets. Also excited to say that all the new SJ45 and SJ45AR battery-powered electric slab booms from North America and Europe have also been launched. These products emphasize the innovation capabilities of our SkyJack team to offer consumers with less space and a broader reach, providing solutions for all construction needs. Turning to agriculture, through the first quarter of the year, expectations are in line with another down year. Despite this, all three of our brands continue to see market share growth. McDonald's combined draper globally, Salford's tillage market share has grown over the last 12 months, and Borgo's air cedar sod gains in the U.S. market. Our ag teams have demonstrated resilience and is evidenced through these gains. Looking at the expectations for 26, North America is expected to be down 20 to 15. Commodity prices remain stagnant. Input costs continue to be high and pressuring farmer profitability. Large dealership groups remain very cautious on whole good inventory stocking levels. And although channel inventory levels are under scrutiny, OEM production levels are purposely underbuilding versus the retail sales level rate in order to shed some of these inventories. In Europe, we have seen some improved outlook for combines, the primary market we participate in for MACDON. The market is seen as being very resilient in the face of geopolitical and commodity pricing headwinds, ultimately resulting in a flat 26. In the rest of the world, particularly Australia and South America, the market is expected to be flat to down. In South America, the market for combine is slightly negative with elevated market risk with tighter credit and government-backed financing. In Australia, concerns over increased fuel and fertilizer costs coupled with hotter and drier conditions are causing some concerns among farmer sentiment. We'll continue to monitor global trade tensions, government bridge payments, and channel inventories to react to those market signals. Our focus at Linnemar Agriculture will be on maintaining our market-leading positions, and how we do that is really through innovation. Some innovation highlights from our agricultural team. The MacDon group has launched its all-new MyMacDon app. The app directly connects users to their dedicated MacDon equipment, putting software updates, support documents, and videos right into their pockets. Our MacDon owners can now access all resources, locate their nearest dealer, check active bulk totes, and view real-time data. From the Borgo team, they've launched the all-new CDI50. This product is not only transport-friendly, but it is designed to deliver unmatched efficiency and agronomic flexibility. The product is 50 feet. You can imagine how difficult it would be to transport a piece of equipment that size, but Borgo team has done this very well. Finally, looking at the automotive industry, we're seeing some temperate expectations quarter over quarter for 26. In North America, 26 expectations are for light vehicle production, down 2%, with higher fuel costs, affordability pressures, and uncertainty way on demand. In Europe, production is expected to decline as elevated energy and manufacturing costs, rising imports from China, and limited export opportunities continue to impact projected output. Finally, in Asia Pacific, growth is expected to slow in 26 as weaker domestic demand, geopolitical disruptions, and rising input costs are weighing on output despite continued support from export activity in the parts of the region. In 2027, however, early projections indicate that we will see a small rebound across all major continents. Turning to Lidmar's CPV performance for the quarter, our key strategic acquisitions of Aludine North America, Leipzig, and beginning in Q2 with the winning groups, Remscheid and Pennsburg facilities are driving strong share gains in existing and new customers. North American CPV was up 24%, Europe was up 10.2%, and Asia Pacific saw growth of 3.4% year over year. Globally, our CPB grew an outstanding 20% to 99.47. Looking at our new business wins for the quarter across both mobility and industrial, Linnemar saw a new business win value of $758 million, a Q1 record going back to 2014. Through our strategic acquisitions and takeover work, we saw significant new program wins for components such as cylinder blocks, cylinder head assemblies, Our propulsion-agnostic new business wins on Knuckles, emphasizes Linamar's structural and chassis expansion, allowing Linamar to expand its propulsion-agnostic portfolio across all powertrain types. Now, looking at some recent news on the mobility side, as you've seen, Linnemar completed his third acquisition with the latest Remscheid and Pennsburg facilities from the winning group. This acquisition aligns directly with our strategy, grow our capabilities, customers, and expertise. The acquisition significantly spans Linnemar's forging expertise to now include the warm forging, which drastically grows our already significant offering in precision gears to include both the bevel and Helical Gears. These two facilities are an incredible strategic fit for Linamar. Not only do they strengthen the technology capability of Linamar, they build on our manufacturing capabilities and products where we are already strong, deepen our relationships with core customers, and position us for continued growth by growing our content vehicle across multiple markets. We're also extremely excited about the performance of both our LIFESIC facility acquisition and our Aludine North American acquisition. Both have integrated seamlessly into the Linnemar family and are truly paying dividends. Leipzig, now known as Linnemar Casting Solutions Leipzig, in conjunction with the traditional Linnemar facility, have collaborated to win a major award of a fully machined heavy-duty truck axle for a highly attractive European on-highway OEM. The core capabilities we acquired at the facility of Iron Casting Solutions and the state-of-the-art installation with 3D printed SAM cores are propelling our operations to be able to expand further in the on- and off-highway markets through a broader offering. Finally, our largest acquisition of the three we've recently announced, Aludine North America, has been a tremendous success so far. In just a few months since acquiring Aludine North America, our teams have been able to generate over $250 million in additional opportunities. Leveraging the vast selection of casting solutions, we're able to support a deep product depth and provide solutions for mobility applications we hadn't been able to do before. As I mentioned last quarter, Linnemar services eight different mega markets in our 2100-year plan, which you can see displayed. The two segments I wanted to focus on today are robotics and defense. We've had some exciting new developments and people are recognizing we are an advanced manufacturing and product development company capable of delivering to any of these markets. In robotics, we've signed an LOI to be the contract manufacturer in North America for COBOX. We partner with two separate parties to build humanoids and are also working with software companies on artificial intelligence development for the brains of those humanoids. It's incredible to see our team's drive to growth, and we're extremely excited of the progress we're making. In the defense, the strides we made are nothing short of that exceptional. Our traction with the key defense primes, not only in Canada, but in the U.S., Europe, and other regions continue to grow. The takeaway is simple. Linamar is not defined by one industry. Automotive is proof of our capabilities, not the limit of them. We are a global, advanced manufacturing and product development partner. With that, I'll turn it over to Dale to take us through a financial overview.

Thank you, Jim, and good afternoon, everyone. Linda covered a high level of the financial performance in the quarter, so I'll jump directly into the business side of the review, starting with mobility. Mobility sales increased by 365.3 million, or 19.2%, over Q1 last year to 2.3 billion. This growth was mainly due to the increased sales from the Q4 acquisitions, which made significant contributions in the quarter. Additionally, the higher launch and mature program volumes further boosted sales. However, these gains are partially offset by the negative impacts of FX rate changes lower volumes on certain ending programs and reduced demand for some EV programs that continue to experience weaker market conditions. Q1 normalized operating earnings for mobility were up 46.3% over last year to 183.5 million. The improvement was driven by the increased earnings from the higher volumes on launching mature programs, the Q4 acquisitions and operational efficiencies though partially offset by lower volumes on the ending programs and EV programs and the negative impact of FX. Turning to industrial sales increased by 6.6% for $42 million to $675.4 million in Q1. The increase was driven by the higher access equipment sales supported by global market share growth for scissors, booms, and telehandlers. This was partially offset by lower agricultural sales in a significantly down market despite global market share gains on key products such as draper headers and air feeders. Additionally, there was a negative FX impact in the quarter. Normalized industrial operating earnings in Q1 decreased by 20.9 million or 16.5% over last year to 105.7 million. The decline reflects the lower agricultural sales the FX impact and a moderate impact from tariffs on certain industrial products, partially offset by the increased earnings from the strong access equipment sales. Starting with our overall cash position, which came in at $1.2 billion on March 31st, an increase of $281.5 million compared to March last year. During the first quarter, we generated $281.6 million from cash from operating activities, which was used partially to fund Q1 CapEx and share buybacks. Turning to leverage, net debt to EBITDA was 0.6 times at the quarter, an improvement from one times a year ago. The amount of available credit on credit facilities was $805.6 million, and our liquidity at the end of Q1 significantly increased to $2 billion. Free cash flow in the quarter was $218.6 million. Our current NCIB program was launched at Q3 25 earnings call and will expire on November 16th. This program authorized the purchase and cancellation of up to 3.9 million shares. To date, we have returned nearly $59 million to shareholders to repurchase of approximately 696,000 shares. This brings our total cash return to shareholders since November 2024 to $159 million, with a repurchase and cancellation of approximately 2.4 million shares. This initiative reflects our disciplined capital allocation strategy of maintaining a strong balance sheet, investing in growth, and returning excess cash to shareholders. Turning to the outlook, I'll outline Linnemar's expectations for Q2, focusing on mobility and industrial segments, in addition to highlighting the changes in our outlook for 2026 from what was announced at our last earnings call. Please note we're not providing segment level guidance for the full year 26 at this time due to the elevated volatility in global markets and ongoing geopolitical uncertainty, which makes segments forecast less reliable. Regarding mobility segment, our outlook for the second quarter is highly positive. We've anticipated double-digit growth in both sales and normalized operating, driven by ongoing program launches, recent acquisitions, and continued operational improvements. Second quarter margins are projected to expand further within our normal range, reflecting strong sales performance, effective launch execution, and consistent cost control. In the industrial segment, agricultural markets remain weak entering Q2. We anticipate industrial sales growth, but expected to, sorry, we anticipate agricultural sales growth, but we do expect normalized operating earnings to decline by double digits with margins below our typical 14 to 18%. Sales gains from access markets will partially offset their cultural softness of margins will be pressured by the new amended 232 tariffs that began in April 26. As a result, on a consolidated basis, we expect double digit sales growth, growth in normalized EPS and a modest contraction on normalized net margins, as well as positive free cash flows. For the full year 26, Our latest outlook is largely consistent to what we provided on the Q4 call with a few key updates. We are now expecting stronger sales growth in the double digits, and we continue to expect growth in normalized VCS. We now anticipate a modest reduction in normalized net earnings margins primarily due to the newly amended 232 tariffs as we continue to evaluate and pursue mitigation strategies. We continue to expect CapEx to increase from prior year while remaining below our normal range of the percent of sales. And we continue to expect a very strong balance sheet with low leverage alongside strongly positive free cash flow. This outlook reflects the strong mobility growth driven from launches, a full year contribution from Allardyne North American Operations and the Leisa Casting Facility, and the newly announced winning facility all supporting top and bottom line performance in mobility. The ag market rate of decline moderating conditions remain soft. The stabilization expected later this year with excess markets showing signs of growth. Overall, the external environment remains mixed and visibility is limited, but Linnemar's fundamentals remain strong. We have a very strong balance sheet significant liquidity, and we continue to expect strongly positive free cash flow, which gives us flexibility to invest and execute. At the same time, mobility is supported by launches and growth from acquisitions, which positions us well for growth as we work through the impact of the amended C-32 tariffs. In summary, Lenormar delivered a very strong quarter, delivering record sales and record normalized EPS, a very strong balance sheet, excellent liquidity. We are well positioned to invest in growth, navigate this volatility, and continue to return capital to shareholders. Thank you, and I'd like to open up for questions.