NN, Inc.

Good day and welcome to the NN Incorporated first quarter 2024 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Steven Poe. Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thanks for joining us. I'm Stephen Poe, Investor Relations contact for NN, Inc., and I'd like to thank you for attending today's business update. Last evening, we issued a press release announcing our financial results for the first quarter ended March 31st, 2024, as well as a supplemental presentation, which has been posted on the Investor Relations section of our website. If anyone needs a copy of the press release or the supplemental presentation, you may contact Alpha IR Group at nnbr at alpha-ir.com. Our presenters on this call will be Harold Levis, President and Chief Executive Officer, and Mike Felcher, Senior Vice President and Chief Financial Officer. Tim French, our Senior Vice President and Chief Operating Officer, will also join us for the Q&A portion of the call. Please turn to slide two, where you'll find our forward-looking statements and disclosure information. Before we begin, I'd ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and one filed in the risk factors section in the company's quarterly report on Form 10-Q for the fiscal quarter ended March 31st, 2024. The same language applies to comments made on today's conference call, including the Q&A session, as well as the live webcast. Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, forwarding change rates, cash flow, tax rates, acquisitions and divestitures, synergies, cash and cost savings, future operating results, performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, the impacts of pandemics and other public health crises and military conflicts on the company's financial condition and other topics. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control. The presentation also includes certain non-GAAP measures as defined by SEC rules. Reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release in the supplemental presentation. Please turn to slide three, and I will now turn the call over to our CEO, Harold Beavis.

Thank you, Stephen, and good morning, everyone. Please turn to page four in our earnings deck. NN had a successful first quarter, highlighted by growth in our core plants and continued execution of our business transformation strategy, which was underlined by a number of observable operational improvements at our underperforming locations. We also continued our commercial momentum, winning new business in the quarter at a very strong pace. capturing more than 17 million of new awards, which we estimate to be about three times market growth rates. Our transformation is fully underway and we're now entering our second year. And I can say for the team that's here, time flies when you're having this much fun. And we're indeed pleased with our results over the last year. And we're looking forward to highlighting some of them today and then taking questions at the end. First, I'm happy to report that Q1 2024 was the third consecutive quarter of exceeding our upward goals and expectations for adjusted EBITDA, free cash flow, and new business wins. We have been driving our trailing 12-month EBITDA up. We believe this is a function of natural company strengths, a stronger team made up of both homegrown leaders and outside professionals, a strong set of improvement initiatives, and being accountable to outcomes and to each other. First and foremost, we've been delivering strong operational improvements. Some of you might wonder what does that mean, operational improvements, a pretty big term. But for us, it means right-sizing our headcount, negotiating with non-directed suppliers, leveraging our global procurement power, upgrading plant managers where needed, combining SG&A roles where possible, and having an organized plan at every plant to take out costs. Additionally, in certain areas, we've had to negotiate and engage with customers on basic economics. Another term for this is continuous improvement or CI, and we're committed to increasing our margins and profit rates on an ongoing basis, and it's working. To be sure it is sustainable and becomes a layer of goodness that we build upon, we have to change our culture in many areas, and that's working also. Sometimes winning and becoming successful is just plain hard work, and we're all about that. As we have noted in the past, a year ago, the company had seven unprofitable plants that were causing a big impact to our bottom line in our cash flows. Our aggressive actions over the last year at these plants has shown clear and immediate results, with three plants returning to profitability already and the remaining four making dramatic improvements. The goal is for this group to become profitable by year end 2024, this year. The commercial team has also been very successful over the last year, and we have secured growth at three times the market growth rates by our estimations. This will enable us to layer in new growth and contribute to our adjusted EBITDA totals in future quarters. Before turning to our first quarter financial results, I'm happy to announce that we are reaffirming our free cash flow and new business win outlooks for the year, while also tightening our outlooks for net sales and adjusted EBITDA. We expect to deliver full year bottom line growth, along with continued strong growth and new business wins. And Mike will cover this in more detail in his section. Please turn to page five. in your deck, NN delivered solid first quarter results with net sales of 121.2 million and adjusted EBITDA of 11.3. Year-over-year net sales volumes were mostly flat after some one-time movements, but adjusted EBITDA grew strongly through the actions that I just walked through. It was our third quarter of year-over-year growth in adjusted EBITDA, and our trailing 12-month adjusted EBITDA of 46.3 million is up 20% of the trailing 12-month adjusted EBITDA of a year ago, or about $7.7 million of improvement. Our adjusted EBITDA margin is now 9.3%, and it's up significantly compared to last year as the turnaround of treble plants and broader operating cost reductions continue to improve our bottom line. Before turning the call over to Mike, I'd like to recognize our global NNP. In a period of significant change for the company, a lot of it instigated by me, Our employees and colleagues are performing in an outstanding basis on on-time delivery, quality, and safety. We're reorienting and injecting best practices into our company as we go along and changing our culture. In-end sales pipeline is as large and as healthy as it's ever been, and we continue to aim to continue winning new business with both new and existing customers globally. With that, I'll turn the conversation over to Mike, who will walk through our financial performance in a more detailed manner.