Commercial Vehicle Group, Inc.

Good morning, ladies and gentlemen, and welcome to the CVG Third Quarter 2025 earnings conference call. During today's presentation, all parties will be in 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 third quarter 2025 results, after which we will open the call for questions. As a reminder, this conference call is being webcast and the Q3 2025 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 market in which CVG operates, fluctuations in the production volumes of vehicles, for which CVG is a supplier, financial governance compliance and liquidity, risks associated with conducting business in foreign countries and currencies, and other risks as detailed in our FDC filings. I will now turn the call over to James to provide some highlights from our third quarter performance.

Thank you, Andy. Good morning and thanks to all those who joined the call. Please turn your attention to the supplemental earnings presentation starting on slide three. As we have highlighted on this slide, CVG delivered continued improvement in profitability despite a very challenging market environment. During the quarter, we delivered an adjusted gross margin of 12.1%, which is up 10 basis points on a sequential basis and up 50 basis points compared to last year. The continued improvement in profitability was again driven by the operational efficiency improvement initiatives we have spoken to in prior calls. I will expand on this a bit more in a minute, but I just want to give a heartfelt thanks to the entire CVG team for their contributions in driving these operational improvements in these very challenging times. Another highlight of the quarter is the continued performance improvement within our global electrical system segment. For the quarter, we saw segment performance inflect, with revenues up 6% compared to the prior year, despite continuing in-market softness. Of note, we benefited from the ramp-up of two key new programs in the quarter. The first is with an autonomous vehicle manufacturer in North America, while the other is with a major automotive manufacturer in Europe. program ramp-ups are in their early stages, and we expect a continued strong and growing revenue contribution from these programs moving forward. We also delivered sequential and year-over-year margin expansion, driven primarily by the higher revenues as well as the operational efficiency improvements we've made. Also highlighted on this slide is our strong year-to-date free cash generation. For the first nine months, we've generated $25 million in free cash, up $14 million from last year, driven by improved working capital performance and lower capital expenditures. I'll speak more about specific guidance later, but we do expect to generate free cash flow in the fourth quarter of 2025. And finally, I just want to highlight that we are not standing still in our efforts to drive further operational efficiencies and reduce costs. In North America, we continue to right-size our manufacturing footprint to adjust to the current demand environment. In EMEA and Asia Pacific, where we are seeing better in-market demand, we are proactively optimizing our production capacity to lower costs and create additional capacity to meet future demand growth. We also continue to manage headcount and flex manufacturing operations work schedules across the company to reduce both STNA expenses and manufacturing overhead costs, respectively. Turning to slide four, I want to provide additional color as it relates to the continued sequential improvement we are seeing at the gross margin line. As we highlighted for the last two quarters, the operational efficiency improvements made related to freight, labor, and plant-level overhead continue to benefit our profitability. We continued that trend this quarter with additional margin expansion of 10 basis points versus the second quarter of 2025, giving us a cumulative improvement of 370 basis points versus the fourth quarter of 2024. What is even more notable is that we were able to extend margins sequentially in the third quarter despite an 11% drop in revenue versus the second quarter of 2025. This clearly demonstrates the operational efficiency improvements we've made to address our cost structure. As a quick reminder, the bulk of these improvements have come from a reduced reliance on expedited freight, optimized terms with our suppliers, and our improved lead times and order quantities. We have also flexed our direct labor to better align customer volume changes, and our new segment alignment has provided a more optimal overhead structure. Our focus is on driving operational efficiency, which has supported our financial performance in a lower demand environment. While we acknowledge the broader market and macroeconomic uncertainty, we are committed to taking the necessary proactive actions to drive improved financial performance. As we look ahead to the eventual in-market recovery, we believe we are well positioned to enhance shareholder value through continuing to win new business, driving accretive growth, accelerating margin expansion, and increasing our capital efficiency. With that, I'd like to turn the call back to Andy for a more detailed review of our financial results.