Gentherm Inc

Greetings and welcome to the GenTherm first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gregory Blanchet, Senior Director, Investor Relations. Thank you. You may begin.

Thank you, and good morning, everyone. Thanks for joining us today. GenTherm's earnings results were released earlier this morning, and a copy of the release is available at GenTherm.com. Additionally, a webcast replay of today's call will be available later today on the investor relations section of GenTherm's website. During this call, we will make forward-looking statements within the meaning of federal securities laws. These statements reflect our current views with respect to future events and financial performance, and actual results may differ materially. We undertake no obligation to update them except as required by law. Please see Gen Therm's earnings release and its SEC filings, including the latest 10-K and subsequent reports for discussions of our risk factors and other significant assumptions, risks, and uncertainties underlying such forward-looking statements. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release and investor presentation. On the call with me today are Bill Presley, President and Chief Executive Officer, and John Duyard, Chief Financial Officer. During their comments, they will be referring to a presentation deck that we made available on the investor section of GenTerm's website. After the prepared remarks, we'd be pleased to take your questions. Now, I'd like to turn the call over to Bill.

Thank you, Greg, and good morning, everyone. Let's begin on slide three. I want to start by saying that the Gen Therm team demonstrated strong execution in the first quarter. Over the last year, we've spent a lot of time improving our operating system. We've been focused on fundamentals that are core to operating in an efficient, consistent manner in all aspects of the business. I visited Gen Therm sites in multiple countries over the last three months, and was able to observe changes in how we operate all locations versus last year. The teams are engaged in targeted actions for growth in new markets, factory floor space occupation and efficiency are increasing, and the teams are adopting tools we've put in place to drive financial rigor. I was pleased to see these efforts starting to produce tangible results in the quarter. The first quarter also demonstrated our ability to execute in a dynamic environment. and we are confident in our ability to continually improve our operations. After spending a year with the team putting tools and processes in place, we concluded that realigning our operating model and structure would drive increased speed and transparency across the organization. Therefore, during the quarter, we initiated an organizational realignment that reduced spans and layers to increase agility and provides a concentrated focus on internal improvements as well as the ability to accelerate our growth platforms. This realignment positions us well to deliver key financial and operational priorities going forward. Strategically, this quarter marked an inflection point in our journey to transform Jenifer. We took action to position the company for sustainable, profitable growth with our announcement to combine with Modine Performance Technologies. This transaction transforms the company With an expanded product portfolio and broader end market exposure, we continue to execute our priorities and strategy even though the environment around us remains dynamic. Since our prior earnings call, the macro and geopolitical environment has changed significantly and is creating an increased level of economic uncertainty. Despite these recent events and other macro issues over the last year, light vehicle production schedules have remained relatively stable, which has allowed us to focus on operational improvements. We continue to assess key data inputs, including dealer inventory levels and customer schedules, as well as collaborating directly with our customers to get real-time insights on future demand. That said, headwinds are beginning to emerge across the globe. These include direct cost increases in logistics, due to lane disruptions and fuel surcharges, as well as cost increases of petrochemicals used in raw materials. In addition, we are now starting to see cost inflation flow through to other materials, which are being indirectly impacted due to increases in processing-related costs. We continue to monitor developments in real time, and we are working closely with our suppliers and customers on a variety of mitigation strategies. We are preparing to implement pass-through or reimbursement mechanisms on applicable costs. We have actions ready to execute both commercially and operationally. We will remain agile, and we are confident in our ability to navigate through volatility and uncertainty. Now, please turn to slide four, where I will discuss some of our first quarter highlights. The first quarter financial results were above our expectations. We secured $395 million of automotive new business awards, which were well-balanced across region, customer, and product. The pursuit pipeline looks robust for the remainder of the year. We made significant progress on our organic growth initiatives, including key announcements with KUKA Home and our new medical product Thermafix, both of which I will discuss further in a few moments. Our product revenues for the quarter were 394 million, a quarterly record for the company, driven by strong automotive climate and comfort solutions growth over market. We delivered solid first quarter margin performance, driven by continued progress on our operational excellence initiatives. The business systems we put in place are beginning to have a meaningful impact, driving improved execution and expanded margins. As we build on this momentum, we remain confident in our ability to deliver sustained performance improvements over time. Turning to slide five, one of our top priorities over the last year has been scaling our existing products and technologies with new markets, new applications, and non-traditional customers deliver strategic, profitable growth. During the first quarter, we continued to prove the broad applicability of our technology beyond automotive through our achievements at home and office, as well as medical. We officially launched and began supplying production parts to KUKA Home, which is a leading global furniture manufacturer. Since mid-2025, GenThurn played an important role as a collaborative innovation partner with KUGA, which led to co-branding of Enhanced Comfort by GenThurn. The launch this quarter also demonstrates our ability to generate revenue quickly in a home and office market by utilizing our core assets and standard kit methodology to maintain the performance, quality, and consumer experiences established in automotive applications. In March, John and I spent time in China at KUKA headquarters with their CEO and senior leadership team discussing our partnership. There is mutual interest in scaling GenThurn products across additional KUKA home platforms. Beyond KUKA, our momentum in home and office is accelerating. Earlier this month, we were selected by a leading North American furniture brand, to supply our climate and comfort products. This marks our fourth consecutive quarter securing a new home and office customer. We anticipate starting production with this customer later this year. Separately, in our medical business, we announced our FDA 510 submission for a new, innovative product that is expected to redefine the standard of care for robotic surgeries. Our patented Thermafix system combines conductive, air-free patient warming with securement technology to help prevent both hypothermia and patient movement on the inclined surfaces used during robotic procedures. We have been vocal about the importance of refreshing our product portfolio in the medical segment and believe this innovative new solution will be a key contributor to accelerating our annual revenue. The regulatory approval process remains on track, and we expect the Thermafix system to begin generating revenue later this year. Overall, we remain committed to repositioning the company for growth by taking our technologies outside of light vehicle markets, and we achieved several important milestones during the quarter. Let's turn to slide six. In January, we took a major step in transforming GenTherm by announcing Our agreement is combined with Modine Performance Technologies, creating a market leader in thermal and precision flow management. The more we work with the Modine team, the more excited I get about bringing this business into the Gentherm family. This is a well-run business with a great team. Through our work together, we are learning techniques and processes that Modine used to transform their business, and we intend to harness those lessons for the good of Gentherm. We have emphasized the importance of expanding our business beyond the light vehicle segment, and Modine is accelerating our access to critical growth markets, including power generation, commercial vehicles, and heavy-duty equipment. This intentional shift in our end-market exposure positions us for increased value creation. We are particularly excited about the new product and market opportunities this partnership unlocks and are more confident than ever in our combined growth trajectories. When we map out the next five years as a combined company, we see a clear path to generating $3.5 billion in revenue and more than a half billion of earnings. I will now hand it over to John to discuss an update on the transaction and highlights for the quarter.