Commercial Vehicle Group, Inc.

Good morning, ladies and gentlemen, and welcome to CVG's fourth quarter and full year 2023 earnings conference call. During today's presentation, all parties will be in the listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Andy Chung, Chief Financial Officer. Please go ahead, sir.

Thank you, operator, and welcome everyone to our conference call. Joining me on the call today is James Wei, President and CEO of CVG. This morning, we will provide a brief company update as well as commentary regarding our fourth quarter and full year 2023 results. After which, we will open the call for questions. As a reminder, this conference call is being webcast in a Q4 2023 earnings call presentation which we will refer to during this call, is available on our website. Both may contain forward-looking statements, including but not limited to, expectations for future periods regarding market trends, cost-saving initiatives, and new product initiatives, among others. Actual results may differ from anticipated results because of certain risks and uncertainties. These risks and uncertainties may include but are not limited to economic conditions in the markets in which CVG operates, fluctuations in the production volumes of vehicles for which CVG is a supplier, financial confidence, compliance, and liquidity, risk associated with conducting business in foreign countries and currencies, and other risks as detailed in our SEC filings. I will now turn the call over to James to provide a company update.

Thank you, Andy, and good morning, everyone. It is an absolute pleasure to be joining you on my first earnings call as president and CEO of CVG. Having served on the board of directors since 2020, I've had the opportunity to witness the strength of CVG's business fundamentals, the transformative strategy in place, and the remarkable growth potential in this organization. We have great strategy, great people, and great customers. I was appointed president and CEO December of 2023, and there was a lot of good progress already underway from the leadership of our chairman and interim CEO, Bob Griffin. I want to thank Bob for all his efforts in the months prior to my appointment as president and CEO. As this is the first time I'm speaking to the majority of you, I'd like to offer a bit of my perspective on the opportunity I see ahead for CVG. I'm sure you're curious what will change with me as CEO. And to be clear, my aim is not to change our strategy, but rather to enhance it. In my role as a board member, I saw firsthand the hard work and planning that went into developing our transformation strategy. We think we are seeing the early benefits of that transformation. as our new business wins drive top-line growth and margin improvement, even as we see a downturn in the Class A truck builds, and this improved profitability is leading to reduced leverage and a healthier balance sheet. Additionally, we have provided our outlook for the full year 2024. More on this later. My goal is to best equip our teams to continue driving this transformation and to make sure we have the right culture in place to enable our teammates to drive us forward every day. In order to build and maintain this growth-focused culture, we need to do three key things. One, develop and reward our employees. Two, excite our customers. And three, deliver results to increase our value to shareholders. Fundamentally, it's all about people, processes, and capability. My goal as CEO is will be to make sure we are developing all three aspects through strong teamwork, continuous improvement, and building capability. I am incredibly excited about that opportunity ahead of us at CBG. Before turning to the details of the quarter, I want to highlight that Bill Johnson was elected to the Board of Directors in December. He brings a wealth of operating experience and expertise across a variety of business areas, including his current role as CEO and a board member of the Board of Directors of Avail Infrastructure Solutions. Bill also served as president and CEO of Wellbuilt from October 2018 to July 2022, and as the president and CEO and COO of Chart Industries from July 16 through June 2018. He possesses over 30 years of global experience, and we're excited to have Bill join our board. I have no doubt CVG will benefit from his skills and perspective. Now, I'd like to turn your attention to the supplemental earnings presentation starting on slide four. Following solid year-over-year improvements in the first few quarters of the year, our fourth quarter results were negatively impacted by a work stoppage at a customer facility and reduced demand. We reported net sales of $223 million in the quarter, and an adjusted EBITDA of $10.3 million. We continue to win and integrate new business, optimize costs, and work to improve profitability of our business. Our continued focus on margins, as well as the contribution of new wins, helped drive a 26% increase in full-year adjusted EBITDA to 6.8%, up 140 basis points compared to last year. For the full year, we generated $19 million in free cash flow, and combined with our strong EBITDA, our net leverage ratio declined to 1.5 times from 2.2 times. Speaking of new wins, we recorded in excess of $150 million of new wins this year on a fully ramped basis, continuing our strong track record of success. Consistent with our strategy, these winds continue to be focused within our electrical system segment and support the product ramp up at our two new plants in Mexico and Morocco, which are focused on meeting the demand growth in electrical systems. We're also currently expanding our footprint with an additional new plant under construction in Morocco. Turning to slide five, I'd like to take this opportunity to highlight some recent strategic actions we've taken. which all serve as a reminder of our ongoing focus to align costs and improve margins at CVG. First, we are closing one vehicle solutions facility in North America and shifting the production to other locations, in line with our goal of lowering our manufacturing costs and improving vehicle solutions margins. Second, we are taking additional steps to reduce organizational costs and align resources to support our highest growth product lines. These actions are part of our ongoing efforts to make sure we are cost competitive and improve our profitability over time. Finally, we announced the sale of our finished tech business in the vehicle solution segment in January of this year. While not a large transaction, it focuses our business portfolio more on our core growth opportunities and demonstrates our commitment to strategic capital allocation. These recent actions should echo well with our long-stated transformation strategy to improve the mix and profitability of our business through the growth of our electrical systems business. And with that, I'd like to turn the call back to Andy for a more detailed review of our financial results.