Allison Transmission Holdings, Inc.

Good afternoon. Thank you for standing by. Welcome to Allison's Transmission Third Quarter 2023 Earnings Conference Call. My name is Alicia, and I'll be your conference call operator today. At this time, participants are in a listen-only mode. After prepared remarks, Allison Transmission's executives will conduct a question and answer session, and conference call participants will be given instructions at that time. As a reminder, this conference call is being recorded. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the conference call over to Jackie Bowles, Executive Director of Treasury and Interestor Relations. Please go ahead, Jackie.

Thank you, Alicia. Good afternoon, and thank you for joining us for our third quarter 2023 earnings conference call. With me this afternoon are Dave Graziosi, our Chairman and Chief Executive Officer, and Fred Boley, our Senior Vice President, Chief Financial Officer, and Treasurer. As a reminder, this conference call, webcast, and this afternoon's presentation are available on the Investor Relations section of allisontransmission.com. A replay of this call will be available through November 8th. As noted on slide two of the presentation, many of our remarks today contain forward-looking statements based on current expectations. These forward-looking statements are subject to known and unknown risks, including those set forth in our third quarter 2023 earnings press release, our annual report on Form 10-K for the year ended December 31st, 2022, and other general economic factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those that we expressed today. In addition, as noted on slide three of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an appendix to the presentation and to our third quarter 2023 earnings press release. Today's call is set to end at 545 p.m. Eastern Time. In order to maximize participation opportunities on the call, We'll take just one question from each analyst. Please turn to slide four of the presentation for the call agenda. During today's call, Dave Graziosi will review highlights from our third quarter 2023 results and provide an update on recent announcements across our product portfolio. Fred Boley will then review our third quarter financial performance and the full year 2023 guidance. Dave will close with a review of our wide-body mining dump and defense and market growth opportunity prior to commencing the Q&A. Now, I'll turn the call over to Dave Graziosi.

Dave Graziosi Thank you, Jackie. Good afternoon, and thank you for joining us. During the third quarter, net sales increased 4 percent year-over-year to $736 million. Sales gained momentum throughout the quarter after a slow start driven by supply chain constraints and expanded OEM shutdowns in July, resulting in August and September sales volumes above monthly levels in the first half of the year. Net sales growth was outperformed by growth in net income up 14 percent and diluted EPS up 21 percent to $1.76. Furthermore, our team's efforts towards price realization and cost mitigation drove gross margin expansion of 230 basis points year over year. Our capital investments continue to fund the ongoing expansion of our technology capabilities as well as product development. focused on value propositions that address the challenges of our evolving end markets. These next-generation initiatives, along with the various financial, operational, and strategic milestones that we have achieved over the last several years, demonstrate the power of Allison to capitalize on market opportunities with new products to drive innovation and growth and create value for all of our stakeholders. The Next Generation initiatives also underscore our dedication to remain a leader in propulsion solutions across all of the end markets we serve and are instrumental to driving future growth. Allison is committed to offering a portfolio of conventional, electric hybrid, and fully electric propulsion solutions designed to meet the needs of customers. Today, I would like to highlight recent announcements across our on-highway product portfolio, starting with alternative fuel sources for our conventional products. In the quarter, we announced our currently exclusive release with Mack Trucks for their compressed natural gas powered granite model truck. To meet the need of refuse collection customers, Allison's proven 4000 series transmission was seamlessly paired with a CNG engine. This partnership is the latest example of Allison's ability to deliver optimized performance and capability in demanding vocations indifferent to the fuel source for the powertrain. Moving forward with Allison's transit hybrid offering, our eGen Flex system, adding to the many nationwide releases we have highlighted in recent quarters, we are pleased to announce earlier this month that the B Metro, the public transit system in Brownsville, Texas, has chosen to equip their buses with the Allison eGen Flex system. Brownsville joins the growing list of transit properties in states such as Indiana, Wisconsin, Nevada, and California that will utilize the eGenFlex electric-only capabilities, activated by geofencing technology to automatically switch to engine-off mode in densely populated areas of the city. We are excited for this partnership and remain committed to collaborating with transit agencies nationwide to support them in their emissions reduction goals. Wrapping up with our eGen power of fully electric e-axles, We were excited to launch the eGen Power 85S, the newest addition to the eGen Power family. Partnering with Anadolu Isuzu, the 85S was integrated into a fully electric 8-meter minibus and released at Bus World Europe in early October. The eGen Power 85S was specifically developed to address the needs of minibus and small truck applications and joins the larger 100S and 130S in the single-motor eGen Power The introduction of the 85S is the latest example of Allison's commitment to expanding our propulsion solution portfolio to meet the demands of the wide range of applications and market segments we serve. In summary, Allison's third quarter results demonstrate strong operating performance with the business well positioned to cross our fuel source indifferent product portfolio. Our products have been developed to support our customers' needs as they adopt to different technology sources and driving future growth across our business. Thank you, and I'll now turn the call over to Fred.