Allison Transmission Holdings, Inc.

Good afternoon. Thank you for standing by. Welcome to Allison's first quarter 2026 earnings conference call. My name is Shamali, and I will be your conference call operator today. At this time, all participants are in a listen-only mode. After prepared remarks, Allison 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 Investor Relations. Please go ahead, Jackie.

Thank you, Shamali. Good afternoon, and thank you for joining us for our first quarter 2026 earnings conference call. With me this afternoon are Dave Graziosi, our Chair, President, and Chief Executive Officer, Scott Mell, our Chief Financial Officer and Treasurer, Fred Bowley, Allison's Chief Operating Officer, and Allison Transmission, Business Unit Leader, and Craig Price, Allison Off-Highway, Business Unit Leader. 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 May 18th. 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 annual report on Form 10-K for the year ended December 31st, 2025. 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 in this appendix to the presentation and to our first quarter 2026 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 provide a business update and briefly review the company's performance. Scott Mell will then discuss Allison's segment reporting structure and further review Allison's first quarter 2026 financial performance and Allison's full year guidance update prior to commencing the Q&A. Now, I'll turn the call over to Dave.

Thank you, Jackie. Good afternoon, and thank you for joining us. Please turn to slide five of the presentation for our first quarter business update. First, I want to recognize and thank our global employee base for all the work done so far this year. Our teams have been working diligently on integration and value capture within both Allison business units. Our execution has tracked closely with our planning, and the integration process is proceeding in a disciplined and structured manner. Having said that, it has not been without a tremendous amount of effort by the Allison teams to arrive at where we are today. As our teams more closely coordinate efforts, we are beginning to see the initial phases of synergy realization take shape across several key areas and expect to begin to see financial benefits later in 2026. It's been encouraging to see the groundwork laid prior to the transaction translate into real momentum and reaffirmed guidance in achieving our target of 120 million of annual run rate synergies. We remain confident in our acquisition thesis accelerating sales growth through the strategic combination of the two business units, strengthening our localized production footprint, and generating sustainable cost reductions that enhance long-term shareholder value. Allison's reach is now greatly expanded with our global operations allowing for more localized production and opportunities for cost reductions. By leveraging increased purchasing scale and utilizing manufacturing in best-cost countries, we expect to drive value creation and margin improvement across our business. I want to give another welcome to our new colleagues around the world, and thank you for all that you do. It's been a productive first quarter and exciting times for Allison as we enter this new chapter. Moving now to a brief update on first quarter sales performance and end market outlooks for both of our business units. Please turn to slide six. Starting with our legacy Allison Transmission business, first quarter net sales were $733 million, a year-over-year decline of 4% when compared against a robust first quarter of 2025. For the North America on-highway end market, we continue to view the truck market with cautious optimism. Although order trends have shown strength and imply a slight ramp throughout the year, we believe there is still uncertainty surrounding geopolitical impacts, including tariffs and final rulings on emissions regulations that are hindering end users' new vehicle purchasing decisions. Continuing with the Allison Transmission business unit, the defense and market had an extremely strong first quarter with revenue up 64% year over year. We continue to see strength from international customers, primarily in track programs with both legacy and new products, including our 3040MX cross-drive transmission. We hold a favorable outlook for the defense and market as national security becomes even more relevant to nations around the world, leading to increased budgets and new programs being funded. Please turn to slide seven. The Allison off-highway business unit generated $673 million of sales in the first quarter with continued growth in the mining and market driven by elevated commodity prices including gold, copper, and rare earth minerals. The construction and material handling and market also performed in the first quarter as global construction markets are seeing steadier investments and positive developments, particularly in Europe. in the agriculture and market. While commodity prices remain a driving factor, there are early positive indicators in certain sub-segments and regions. For example, the low horsepower market in India. But overall, a fairly muted environment even prior to the start of the conflict in the Middle East. On that topic, the conflict in the Middle East currently has undetermined impact and implications both favorable and unfavorable for multiple end markets across Allison business units. While the duration of the conflict remains uncertain, we have not seen any material disruption to our business at this time. We recognize the potential for indirect impacts across our supply chains, energy markets, and broader macroeconomic conditions, and our teams are actively monitoring and maintaining close coordination. In summary, Integration is progressing as expected and value capture is materializing. End markets, although impacted by uncertainty in some aspects, are steady, if not showing signs of recovery. To everyone across our organization, thank you for the extraordinary commitment, resilience, and teamwork you've shown. Your efforts have laid a strong foundation for Allison's futures. To our investors, we are confidently positioned to unlock meaningful synergies, accelerate growth, and create lasting value. Now I'll pass the call over to Scott for a review of Allison's segment reporting structure, first quarter 2026 financial performance, and full year guidance update.