Core Molding Technologies Inc

Good morning and welcome to the Core Molding Technologies first quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Sandy Martin of Investor Relations. Please go ahead.

Thank you and good morning, everyone. We appreciate you joining us for the Core Molding Technologies conference call to review first quarter results for 2022. Joining me on the call today are Core Molding's president and CEO, Dave Duvall, and the company's EVP and CFO, John Zimmer. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section at coremt.com. Today's call, including the Q&A session, will be recorded. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance or forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements by their nature are uncertain and outside of the company's control. Actual results may differ materially from those expressed or implied. Please refer to the earnings press release that was issued today for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. Core molding technologies assumes no obligation to publicly update or revise any forward-looking statements. Finally, the earnings press release we issued earlier today is posted on the investor relations section of our website at coremt.com. A copy of the release has also been included in an AK submitted to the SEC. And now I would like to turn the call over to the company's CEO, Dave Duvall. Dave?

Thank you, Sandy, and good morning, everyone. Let me start today's call by celebrating an accomplishment with our teams. We were recently notified of the Gallus Award nomination that recognizes core molding for Orbis' Supplier of the Month, and this is two months in a row. The nomination is provided by the Orbis plant teams to companies that have stepped up to take whatever actions are necessary to support the Orbis value proposition. This value proposition exemplifies a commitment to provide the highest level of quality, service, and on-time delivery with flawless execution. We are grateful and humbled by the nominations. I am proud of our team for their commitment to excellence in the field, especially given the challenging supply chain. During last quarter's call, John and I talked about implementing a much more proactive investor outreach program that started with our earnings conference call. Today, we're expanding on that by adding a questions and answers session at the end of our prepared remarks. We are pleased with your action from new and existing investors as we continue to create more dialogue and transparency with the investment community. Additionally, we have expanded our outreach to attend additional conferences and non-deal roadshows as part of our new ongoing strategy to share our business transformation and growth story. Our EVP of Human Resources, Renee Anderson, likes to remind me that when you think you've communicated enough, you need to do it 10 times more. I appreciate her coaching, and I believe I've learned from it. This is exactly why John and I are ramping up our investor and public communications. In the past, Core Molding was very much more a medium heavy-duty truck company with about 91% of our revenue coming from the transportation industry. Today, transportation represents less than 40% of our revenues. This is not because we reduced our revenue on truck, but a direct and purposeful result of our business transformation strategy to diversify our revenue into other markets that are either growing or still early in the conversion process of transitioning from traditional materials, to engineer materials to obtain the benefits of light weighting, design flexibility, strength to weight ratio, and corrosion resistance. I know we keep saying it, but we can never state it enough. The conversion from traditional materials to an engineered material is typically a significant change for a customer, which is why it is so important to have a technical solution sales approach to help the customer optimize the end solution for them and their end customers. It does require more upfront work, including design, development, and simulation, but it enables customers to create unique products and solutions that by the basic design of the engineered material performs better. The bottom line is that there is always a finite number of end products that will be purchased, but there is an almost unlimited demand for product improvements. I think it's exciting to be in a company where we can utilize the largest portfolio of processes, to optimize materials at their chemical and even molecular levels to create unique solutions that improve our infrastructure, environment, and society. This, to me, will have unlimited demand, no matter what changes we see in the market or society. So, back to the original question. Why change in communication? We want to share our transformation with the investor community because we know it's an exciting opportunity for growth and absolutely is a significant change in our business model. Today, I will discuss our continued progress on initiatives and touch on some highlights in our 2022 first quarter results. Then I'll turn the call over to John to review Q1 in more detail. Lastly, I will come back to wrap up the call and discuss our efforts around the company's important sustainability program at core. We continue to grow our relationship with large blue chip companies, like UFP Industries and the building products industry, Navistar, PACCAR, Volvo, serving the heavy-duty truck industry. We also have secured a major market share in the marine and land-powered sports industry with Yamaha and BRP in North America. Revenue growth and diversification are key components of our long-term strategy. And in the first quarter of 2022, we successfully added $10 million of net new wins. These net new wins will launch between 2022 and 2024, and are incremental to the $75 million of net new wins that we achieved last year. And we are beginning to generate incremental net sales this year from those net new wins. This new business further diversifies the company's revenue by expanding into growing markets like industrial, utilities, packaging, as well as power sports. The momentum from 2021 has carried into 2022, and we will continue to strategically diversify as we purposefully grow our business. We launched three new programs in the first quarter of 2022, and they are beginning to ramp up volumes. Working with our customers, we are on schedule to launch several additional programs in 2022, which were included in last year's net new wins. Additionally, the Ford Bronco roof program, which we won in 2020, is set to ramp up production in the second quarter this year, and we believe that demand will ramp up quickly for this product. Flawless launches of major programs require robust processes, disciplined execution, and a dedicated team. I appreciate and do not underestimate our team's level of effort, diligence, and hard work required to bring all of these new products to life. New business wins continue to be our primary growth driver. Our opportunity pipeline is robust at over $200 million. We are now to a point that in order to continue our revenue expansion, we need to add capacity. John will discuss later the change to our capital expenditure plan and the benefits from our new wins on our revenues in the first quarter. Turning now to our financial results, fiscal first quarter results were strong. We reported net sales of over $90 million. That's the highest quarterly sales ever for core molding. We grew adjusted EBITDA dollars with a double-digit adjusted EBITDA of 10.5%, which was our stated goal. Our continued focus to offset the impact of raw material inflation that began in 2021 resulted in better overall profitability, despite the dilutive impact to the gross margin percentage. We are seeing material and labor supply pressure stabilize, and customer demand continues to be strong. We recognize that the world and market continue to be challenging for all, and therefore monitor daily in customer demands. With that, I'll turn the call over to John Zimmer to further discuss our financial results.