The Eastern Company

Greetings and welcome to the Eastern Company's fourth quarter fiscal year 2022 earnings call. At this time all participants are in a listen-only mode and a question and answer session will follow the formal presentation. If you wish to ask a question during the presentation please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star two if you would like to remove your question from the queue. It is now my pleasure to turn the conference over to your host, Mr. Ernie Hawkins. Please go ahead.

Good morning, and thank you, everyone, for joining us. Speaking today will be Eastern's president and CEO, Mark Hernandez, and our CFO, Nicholas Vlahos. After that, we'll open the call for questions. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements about the company's future financial performance and business prospects, including, without limitation, statements regarding revenue, gross margin, operating expenses, and other income and expenses, taxes, and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected in these forward-looking statements. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. For more information regarding these risks and uncertainties, please refer to risk factors discussed in our Form 10-K for the fiscal year filed with the SEC on March 14, 2023, and our other filings with the SEC. In addition, during today's call, we will discuss non-GAAP financial measures that we believe are useful as supplemental measures of Eastern's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation from GAAP results. A reconciliation of each of the non-GAAP measures discussed during today's call to the most directly comparable gap measures can be found in the earnings press release available on our website at www.easterncompany.com under the investor information tab. With that, I'll turn the call over to Mark for opening remarks.

Thanks, Ernie, and good morning to those who have joined us on the phone and those participating via the web. We released Eastern's fourth quarter and full year 2022 numbers in our Form 10-K yesterday afternoon. Before I get into the financial figures, I would like to introduce myself to our shareholders and investor community. I have been in commercial vehicle industry for 29 years, mostly manufacturing trucks under the Freightliner International brands, as well as managing supply chain operations in those brands. I am well positioned to understand the dynamics of the companies that make up the Eastern Company, especially after serving as an independent director on the board. After a thorough analysis of working capital, return on invested capital, on-shoring, and other key ratios, the Eastern Company is positioned for solid operating results and future growth. Of course, our greatest asset is our people, and they are the team that will deliver the results. So that is one of my key areas of focus, along with solid operating performance. Prior to Nick's review of the detailed results, I would like to take a few minutes to reflect on the year. 2022 represented a year of continued transformation and focus on our operations for long-term growth and shareholder value creation. Each of our businesses experienced varying degrees of instability due to freight bottlenecks and cost fluctuations for freight and raw materials. Our team continued to execute in a very challenging market environment. All of our businesses experienced supply chain disruptions and increase in freight and raw material costs. We were able to partly offset these costs through timely price increases and cost recovery actions. We also reduced late deliveries through active sourcing and supply chain management and ended 2022 with working capital as a percentage of sales of 26.1% compared to 27.2% at the end of 2021. We were also able to divest our last remaining non-core business, Argo EMS, and will allow us to focus on core our core capabilities and offerings. In all, I believe our execution in 2022 underscores the quality of the leadership team we have built. Nick will now take you through a more detailed commentary on the fourth quarter and full year results.