STRATTEC SECURITY CORPORATION

Greetings. Welcome to Strat Tech Security Corporation's second quarter fiscal year 2026 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Deborah Pulaski, Investor Relations. Thank you. You may begin.

Thank you, and good morning, everyone. We appreciate you joining us for STRATEC's second quarter fiscal 2026 financial results conference call. Joining me on the call this morning are Jennifer Slater, President and CEO, and Matthew Pauley, Vice President and Chief Financial Officer. Jen and Matt will review our financial results, progress being made to transform STRATEC, and our outlook. You can find a copy of the press release and the slides that accompany our conversation today on the investor relations section of the company's website. If you are reviewing those slides, please turn to slide two for the safe harbor statement. As you are aware, we may make some forward-looking statements on this call during the formal discussion as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks, uncertainties, and other factors are discussed in the earnings release, as well as with other documents filed by the company with Securities and Exchange Commission. You can find these documents on our website as well. I want to point out that during today's call, we will discuss some non-GAAP financial measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP to comparable GAAP measures in the table accompanying the earnings release and slides. So with that, let me turn it over to Jen, who will be referencing slides three through five.

Thank you, Deb, and welcome, everyone. We delivered a strong second quarter despite a challenging macro environment, which included some supply chain challenges for the industry, moderating automotive production, and foreign exchange pressures. We believe our results further validate the effectiveness of our transformation actions and our focus on protecting profitability as we work to drive process improvement, institutionalize new practices, and leverage the great team we have built. Sales grew 6% driven by pricing, favorable sales mix, higher content value, new program launches, and tariff recovery. We achieved gross margin in the quarter of 16.5% with margin expanding 330 basis points over last year. The transformation is translating to the bottom line and delivering improved returns for our investors. Net income nearly quadrupled year-over-year to $5 million, or $1.21 per diluted share. On an adjusted basis, earnings per share grew 163% to $1.71. During the second quarter, we generated $14 million in cash from operations, bringing our year-to-date cash flow to $25 million. We have an exceptionally strong balance sheet with $99 million in cash and total debt of just $2.5 million. Our financial position gives us the flexibility to continue to invest in the business, manage through market volatility, and explore strategic opportunities. We continue to drive actions to reduce costs and put talent in the right positions to deliver innovation and agility. During the quarter, we implemented a voluntary retirement program which combined with other fiscal 26 restructuring actions should generate $3.4 million in annualized savings. This layers on top of the cost reductions completed in the prior fiscal year and demonstrates our focus on operational excellence and an appropriate cost structure. We have assembled a great team here at Strathec that is demonstrating the ability to collaborate to drive improvements across the organization. We will continue to invest in developing our employees, bringing in additional talent where needed, and providing the tools to improve processes and provide the data required for nimble decision making. Our strong balance sheet and positive momentum provide us confidence that we can continue to execute through this cycle and create meaningful value for our shareholders. With that, I'll turn it over to Matt to walk through the financial details.