Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide an overview of how Atmus Filtration Technologies plans to manage manufacturing transitions in response to tariffs? A: Steph Fisher, CEO, explained that in the near term, the company is focused on availing itself of USMCA certifications and exemptions, particularly for its manufacturing facility in Mexico. They are also examining delivery routes and distribution flows to mitigate tariff impacts. Currently, there are no plans for long-term manufacturing changes as they have a strong presence in the US.
Q: How is the current market environment affecting Atmus's M&A strategy in industrial filtration? A: Steph Fisher, CEO, stated that while the market environment has increased the difficulty of finding targets, the company remains focused on its growth strategy through M&A. They continue to evaluate targets in their pipeline, despite the uncertain landscape, with a disciplined approach to deliver long-term shareholder value.
Q: With the various factors affecting revenue, does Atmus still expect to hit the midpoint of its revenue guidance range? A: Steph Fisher, CEO, confirmed that despite market softening, the company expects to be around the midpoint of its revenue guidance. The aftermarket is expected to be flat year-over-year, and pricing adjustments due to tariffs are now included in their guidance, offsetting some market pressures.
Q: How does Atmus plan to manage pricing throughout the year to achieve the expected 3.2% increase? A: Jack Kinsler, CFO, explained that pricing will ramp up throughout the year, with a slight increase in the second quarter and building to between 4% and 5% in the third and fourth quarters. This includes both base pricing actions and mid-year adjustments.
Q: What impact would a rollback of emission standards have on Atmus's business? A: Steph Fisher, CEO, noted that while the EPA's review of regulations is ongoing, Atmus is well-positioned to meet current and future regulatory requirements. They are monitoring the situation closely and are prepared to support their OEM partners regardless of the outcome.
Q: How is Atmus addressing the potential impact of Section 232 tariffs and USMCA exemptions? A: Steph Fisher, CEO, stated that the company has conducted scenario analyses and is focused on mitigating tariff impacts through USMCA certifications and supply chain adjustments. They aim to pass any remaining costs to the market while maintaining margin neutrality.
Q: Are there any competitive advantages for Atmus due to the tariff situation? A: Steph Fisher, CEO, mentioned that while there might be some product-level differences, there is no significant competitive advantage expected from tariffs. The company is not relying on tariff-related market share gains in its guidance.
Q: How is Atmus reconfiguring shipping routes to mitigate tariff impacts? A: Jack Kinsler, CFO, explained that Atmus has already enacted some shipping lane reconfigurations and is taking advantage of available exemptions to mitigate tariff impacts. They continue to explore additional mitigation opportunities as they arise.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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