American Axle & Manufacturing Holdings, Inc.

Good morning. My name is Jason, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the American Axle and Manufacturing first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you'd like to ask a question during this time, simply press the star key, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then two. As a reminder, today's call is being recorded. I would now like to turn the call over to Mr. David Lim, Head of Investor Relations. Please go ahead, Mr. Lim.

Thank you, and good morning from Detroit. I'd like to welcome everyone who is joining us on AAM's first quarter earnings call. Earlier this morning, we released our first quarter of 2024 earnings announcement. You can access this announcement on the Investor Relations page of our website, www.aam.com. and through the PR Newswire services. You can also find supplemental slides for this conference call on the investor page of our website as well. To listen to a replay of this call, you can dial 1-877-344-7529, replay access code 944-4230. This replay will be available through May 10th. Before we begin, I'd like to remind everyone on the matters discussed in this call may contain comments and forward-looking statements. subject to risks and uncertainties which cannot be predicted or quantified and which may cause future activities and results of operations to differ materially from those discussed. For additional information, we ask that you refer to our filings with the Securities and Exchange Commission. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures, as well as a reconciliation of these non-GAAP measures to GAAP financial information, is available on our website. With that, let me turn things over to AM's Chairman and CEO, David Dowd.

Thank you, David, and good morning, everyone. Thank you for joining us today to discuss AM's financial results for the first quarter of 2024. Joining me on the call today is Chris May, AM's Executive Vice President and Chief Financial Officer. To begin my comments, I'll review the highlights of our first quarter financial performance. Next, I'll touch on some business development news and provide commentary about the industry. After Chris covers the details of our financial results, we will open up the call for any questions that you may have. So let's begin. AM's first quarter of 2024 sales were $1.61 billion. AM's adjusted earnings per share was 18 cents per share, and our adjusted free cash flow was a use of $21 million. First quarter production environment was relatively more stable compared to previous quarters, supporting our production system efficiency. The volumes on our key programs were also stronger than a year ago. From a profitability perspective, AMS adjusted EBITDA in the first quarter was $206 million, or 12.8% of sales. The year-over-year margin improvement stemmed from the benefits of production stability, stronger volumes, and our improvement initiatives. Our results demonstrate on a sequential basis that we are experiencing good traction with our performance plans. Margins for both of our business units increased in the first quarter from the fourth quarter. So 2024 is off to a solid start. Chris will provide more details about our overall financial performance during the prepared remarks. Let me talk about some business updates, which you can see on slide four of our presentation deck. We are very pleased to announce that AM, working with our key partner in advance, will supply XPain DD with three-in-one electric drive units in China. The start of production is slated for later this year. Thus far, our shipments are approaching almost a half a million electric drive units in China over the last several years. This clearly demonstrates AM technology and the market demand for our electric drive systems. Furthermore, we won contracts with multiple luxury European OEMs to supply electric vehicle components. In addition to our strong ice and hybrid business, Our two-pronged electrification strategy of providing full electric drive systems and components for electric vehicles well positions AM to take advantage of the growing global electrification market. Now let's talk about the industry. Although timing is fluid, electric vehicles have established a footing in the developed markets. However, in the near term, OEMs are reformulating their respective powertrain strategies given a recent consumer adoption rate, especially here in North America. What this means is current ICE platforms will run longer than originally expected, and there potentially could even be additional future generations of ICE vehicles, especially with hybrid applications. Either way, this is highly beneficial for American Axle. I've said this before, the market is the boss, and the end customer will ultimately influence what is moving through the showroom. While battery technology, charging infrastructure, and cost structure improve over time, AM will continue the development of our electric product portfolio and further position ourselves to be agnostic to changes in propulsion system technologies. But as a company, AM is very focused on maximizing our current product portfolio and driving profitable growth. But given the dynamics I just mentioned, It's not a growth at all costs approach. We will be disciplined, we will seek appropriate returns, and we will make hard but necessary decisions while pursuing new business, especially in the area of electrification. In other words, any business we take on must make business sense and add value to our company. From an ESG perspective, we are also very pleased to announce that we recently published our 2023 sustainability report. Some of the key highlights from that report include we achieved ISO 5001 certification at all of our manufacturing facilities. We received 21 quality performance awards. We exceeded our 2023 U.S. renewable and carbon-free energy goals. We increased our supplier diversity spend year-over-year by 12%, and we launched a global transportation campaign to reduce emissions. Clearly, AM is committed to properly growing our business, but in a sustainable and socially responsible way. Let's quickly talk about our guidance. The strong first quarter performance gives us added confidence about our full year guide. However, the year is still early and much can change between now and December the 31st. As such, our guidance remains unchanged for now. AM is targeting sales of $6.05 to $6.35 billion. our adjusted EBITDA of approximately $685 million to $750 million, and adjusted free cash flow of approximately $200 to $240 million. To conclude my remarks, and as I have communicated previously, our aim is on the future, and we will continue to drive our efforts towards securing our primary legacy business, and we've made great progress on that, generating strong free cash flow, strengthening our balance sheet, advancing our electrification portfolio, and positioning AM for profitable growth. So with that, let me now turn the call over to our Executive Vice President and Chief Financial Officer, Chris May. Chris?