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SEC filingRevenue grew 4.2% to $528.8M, but gross margin fell to 36.0% as tariff costs weighed on profitability, leading to a 24.3% decline in net income.
While segment-level financials are not separately disclosed in the authoritative packet, the business context indicates that Light Duty segment margins faced pressure from tariff costs and wage inflation. Heavy Duty sales benefited from pricing actions, and Specialty Vehicle net sales were flat year-over-year, as tariff-related pricing actions in certain categories were offset by reduced customer demand in the specialty vehicle sector.
Net cash provided by operating activities was $43.8 million, compared to $51.2 million in the prior year period. Capital expenditures decreased to $8.4 million from $11.0 million, reflecting timing of spending on capital investments. Free cash flow, defined as operating cash flow less capital expenditures, was $35.3 million. The company used $50.5 million for share repurchases during the quarter, funded by free cash flow and modest increases in net debt.
Management noted that new tariffs and reactionary tariff adjustments by other countries have impacted the business and contributed to cost increases, with expectations that these impacts will continue. The company's liquidity could be negatively affected by higher tariffs, an extension of customer payment terms, a decrease in demand, higher interest rates, or other factors. There can be no assurance that cost-saving initiatives, pricing increases, or supplier diversification will fully offset inflationary pressures or that price increases will not negatively impact customer demand.