Core Molding Technologies Inc

Welcome to the Core Molding Technologies first quarter fiscal 2023 financial results conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. Now, I will turn the call over to Sandy Martin, three-part advisors. 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 2023. 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 anytime 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 statements made in today's discussion that are not historical fact, including statements or expectations or future events or future financial performance are forward-looking statements and are not made pursuant and are 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. Core molding technologies assumes no obligation to publicly update or revise any forward-looking statements. Management will refer to non-GAAP measures, including adjusted EBITDA, free cash flow, and return on capital employed. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. 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 Dave Duvall. Dave.

Thank you, Sandy. Good morning and welcome to our first quarter earnings call. I first want to thank the CoreMolding team for our outstanding financial results. It is a direct result of a hardworking team of skilled people driving our business in a shared direction with a passion to improve every day. It is exciting to see our business transformation progressing, especially when you can feel the momentum of the change increasing. As we stated in March, one of our key strategic goals for 2023 is profitability improvement. The direct measurement of this is reflected in our gross margin. I'm excited to communicate that our gross margin for the quarter was 17.8%. That's the highest in over five years. This is a sequential improvement of 440 basis points from the fourth quarter and an increase of 180 basis points from Q1 of the prior year. This was driven by our continued focus on operational execution in our challenge plants, material cost recoveries, and technical solution sales as we expand into newer markets. As we stated in March, our must-win battle for 2023 is to fully embed our operational excellence processes in all of our operations with a focus on our lower performing locations. We are strategically focused on improving operational performance and specifically improving the productivity and profitability at all of our operations to optimize our current capacity. This is always never ending, but we know that we have some short term opportunities to capture that will both improve our margins and open more capacity within our sheet molding compound business. In Q1, we have increased our plant overall productivity by more than 8%. This is good progress, and I appreciate how focused our operational teams and plants are on supporting each other in driving our must-win battle for 2023. We also know there is still much more opportunity for us to capture before the end of the year. Now turning more specifically to the quarter, the team has worked extremely hard and focused on our four strategic goals for the year of revenue growth, technical solution sales, profitability improvements, and free cash flow generation. The first quarter results reflect our progress on these goals with strong gross margin and operating income improvements compared to last year on solid sales growth. We continue to see strength in our largest market, medium and heavy duty truck, with increased demand during the first quarter. The first quarter truck demand increase also includes business with a new truck customer which was launched in the second half of 2022. In the first quarter, revenue mix shifted, leading to 50% of our sales coming from medium and heavy duty trucks, with the new truck business contributing to this growth. We also saw an increase in demand in the power sports market in Q1, while building products has been pressured since the beginning of the year. The solid sales growth in the first quarter 2023 compared to 2022 of 9.8% demonstrates the benefits from the company's strategic diversification strategy into new end markets. We also made significant margin improvement progress by delivering higher gross margins of 17.8%, which reflects ongoing achievements from our transformation process. We continue to win and launch programs in the industrial and utilities categories, Specifically, a number of projects related to stormwater solutions, flush covers, and in-ground bulk products, along with other industrial and utility projects that we expect to be in full production this year. We are excited about these launches because they represent differentiated growing and markets where we provide high-value engineered solutions. All of these projects drive margin enhancements and create a value differentiator with our customers as we improve product performance, lower costs, and reduce manufacturing complexities for our customers. We are also excited about publishing our inaugural sustainability report, which was posted on our website on March 21st. We do see more customer requests to support them on their sustainability path by either using recycled material or developing a recyclable solution, usually by converting traditional materials to a recyclable product. Specifically, we have converted thermoset products or solutions, which are not recyclable, to thermoplastics, which are recyclable. Again, this is aligned to our strategy of providing a technical solution that utilizes our wide portfolio of processes. Implementing our sustainability strategy has taken almost a year, and I am proud of how far we progressed in this area. It is a journey. And I am looking forward to how we will integrate our sustainability goals outlined in our 30 by 30 targets into our business strategy. And I firmly believe this will enhance our customer and employee value proposition. We also expect to receive our Ecovada certification in July, which further supports the value proposition of several industrial and utility customers. It makes us a more holistic and disciplined organization that is visibly aware of our responsibility to our employees, communities, and the environment. With that, I would like to now turn it over to John to cover the financials in more detail.