STRATTEC SECURITY CORPORATION

Greetings. Welcome to the STRATEC first quarter fiscal year 2027 financial results conference 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 conference over to Deborah Pawlowski, Investor Relations for STRATEC. Thank you, Deborah. You may begin.

Thank you and good morning, everyone. We appreciate you joining us for STRATEC's first quarter fiscal 2027 financial results conference call. Joining me on the call today are Jennifer Slater, our President and Chief Executive Officer, and Mathew Pauli, our Senior Vice President and Chief Financial Officer. Jen and Matt will review our first quarter financial results, the progress we are making in our transformation, and our outlook for fiscal 2027. You can find a copy of the news 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 forward-looking statements during the formal discussion and 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 and uncertainties and other factors are discussed in the earnings release and in other documents filed by the company with Securities and Exchange Commission. You can find those documents on our website as well. I also want to point out that during today's call we will discuss certain non-GAAP financial measures which we believe are useful in evaluating our performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures with the most directly comparable GAAP measures in the tables accompanying the earnings release and in the supplemental slides. So with that, I'll turn the call over to Jen, who will begin with slide three.

Thank you, Deb, and good morning, everyone. Our first quarter results reflect continued progress in transforming Stratec into a more resilient, higher performing business. We generated $10.8 million in cash from operations, delivered gross margin of 16.5% on sales of $147.2 million, and ended the quarter with $111.8 million in cash and no debt. We achieved these results against lower customer production volumes and continued inflation and foreign currency pressure. While sales and earnings declined from the prior year quarter, gross margin improved 90 basis points sequentially on lower sales and adjusted EBITDA increased to $13.5 million from $12.5 million in the fourth quarter. We believe this demonstrates the progress we are making in improving the underlying performance of the business. We remain focused on the actions within our control, improving productivity, reducing our cost structure, serving our customers, and allocating capital with discipline. As an example, during the quarter, we implemented additional restructuring actions in our Mexico operations that are expected to generate $1.3 million in annualized savings. including these actions, the annualized savings associated with restructuring initiatives implemented since we began the transformation in fiscal 25 are over $10 million. It is worth highlighting that we believe there are meaningful additional opportunities to improve our cost position through supply chain improvements, automation, and more efficient manufacturing processes. These opportunities are important both to supporting margins in the current environment and to strengthen our long-term competitive position. Our cash generation also gives us flexibility to advance our strategy while returning capital to shareholders. During the quarter we repurchased approximately 68,000 shares for $5 million while continuing to build our cash balance. We also are investing in our strategic initiatives for future growth and the sustainability of the business. Slide 4 highlights how our operating transformation and financial strength support the next phase of Stratex development. We are continuing to develop plans for additional productivity enhancements and cost reductions. At the same time, we are engaging with more prospective customers and building the relationships needed to support longer term growth. Our commercial efforts remain centered on permission, motion and hold. Permission enables secure vehicle entry, motion encompasses powered access systems and hold includes latching solutions designed for safety, strength and durability. This framework aligns our commercial, innovation and engineering teams around the access experience we deliver and the opportunities we see with customers. Organic growth in automotive takes time. We are working to engage earlier in customers' development processes, increase our content on existing platforms, pursue new platforms, and expand our customer relationships. In parallel, we are evaluating acquisitions that could accelerate customer diversification enhance our product offerings and increase our scale. We have an active funnel of acquisition targets and incurred $2.4 million in business development expenses during the quarter, primarily related to advancing these opportunities. Our approach remains disciplined. We are evaluating acquisitions based on strategic fit, financial returns, capital requirements, and execution risks. Our strong balance sheet gives us the ability to pursue strategic growth, but we will remain mindful on how we deploy capital to create long-term shareholder value. In addition, we will be balanced regarding growth and returning capital to shareholders. Importantly, pursuing strategic growth does not detract from our focus on improving the business we operate today. We will continue to invest in productivity Automation, and Operational Execution while maintaining the financial flexibility to navigate industry variability. With that, I'll turn the call over to Matt to walk through the financial details.