February 26th, 2026

The call conveyed a generally positive picture: robust top-line growth (22.4% full year), margin expansion, EPS growth, successful initial integration of the Nissens acquisition (meaningful revenue and healthy EBITDA margins), and operational initiatives that are expected to drive synergies. However, there are notable challenges — a material weakness identified at Nissens (IT controls) with remediation underway, a significant decline in the wire sets subcategory, tariff-driven margin compression despite pass-through pricing, reduced operating cash flow due to inventory build, and elevated leverage (2.7x) that management plans to reduce. Management provided a constructive outlook for 2026 (low- to mid-single-digit sales growth; 11%–12% adjusted EBITDA margin) while warning of Q1 comparability and tariff uncertainties. Overall, highlights and positive trends outweigh the disclosed challenges.

Company Guidance

For fiscal 2026 management guided to sales growth in the low- to mid-single-digit percentage range, an adjusted EBITDA margin of 11%–12% of net sales, total operating expenses (including factoring) of roughly $106M–$114M per quarter, interest expense of about $30M for the year, and depreciation & amortization of $45M–$50M; they excluded potential U.S. tariff changes from the outlook and intend to pass tariff costs dollar-for-dollar, expect seasonal variability with a tough Q1 comp for Temp Control (preseason spans Q1–Q2), aim to reduce leverage from the 2.7x quarter-end level toward a 2.0x target by 2026, and continue pursuing $8M–$12M of run‑rate synergies from the Nissens integration.