Dauch Corporation

Good morning. My name is Rocco and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Dow Corporation first quarter 2026 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 would 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, press the star key, then the number 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.

Hey, thanks, Rocco. Thank you, and good morning, everyone. I'd like to welcome everyone who is joining us on Dow Corporation's first quarter earnings call. Now, earlier this morning, we released our first quarter of 2026 earnings announcement. You can access this announcement on the Investor Relations page of our website, www.dow.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. A replay of this call will be available through May 15th. Now, before we begin, I'd like to remind everyone that the matters discussed in this call may contain comments and forward-looking statements that are 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, please reference slide two of our investor presentation or the press release that was issued today. 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 the non-GAAP measures to GAAP financial information, is available in the presentation. With that, let me turn things over to our Chairman and CEO, David Dow. Thank you, David, and good morning, everyone.

Thank you for joining us today to discuss Dow's financial results for the first quarter of 2026. Joining me on the call today is Chris May, Executive Vice President and Chief Financial Officer. This quarter marks the first time our results include the Dow Lay acquisition, and I'm very pleased with the performance as we begin to capture integration synergies and leverage our combined operational strengths. The acquisition has met our expectations with the product portfolio, with customers, and very importantly, the strong personnel that came with the acquisition. The transaction brings together two great companies with size, scale, and compelling industrial logic, positioning us for long-term success. In addition, we have had constructive discussions with our major customers about the acquisition, and feedback continues to be very positive as they appreciate our focus on quality, technology leadership, operational excellence, watch readiness, as well as continuity of supply. We are excited about the strong value and long-term strategic benefits of this transformational transaction. As for today's agenda, I'll review the highlights of our first quarter financial performance. Next, I'll touch on some business updates, commentary on the industry, and our synergy progress, as well as an update on our guidance. I'll then turn the call over to Chris to cover the details of our financial results, after which we will open up the call for any questions that you all may have. So let's begin with some of the details. The company's first quarter 2026 sales were $2.4 billion, and adjusted earnings per share was $0.34. And adjusted pre-cash flow was a use of $41 million. First quarter North American production was down approximately 2%. Europe was down approximately 1%. And global production was down approximately 3%. However, our legacy sales were flat on the quarter, but on a pro forma combined sales, we were up slightly. Specifically, we experienced a mixed effect on GM's heavy-duty large truck production, which was down early in the quarter as they prepare for the next model year launch, whereas GM's light-duty trucks were strong. In general, day supply of inventory with GM large trucks appeared to be at their expected levels, and SUVs appear to be on the lighter side. The Ram Heavy Duty continues to enjoy year-over-year favorable comparisons, which is positive. In addition, we saw nice strength in both BMW and Volkswagen CUV platforms here in North America. From a profitability perspective, our adjusted EBITDA in the first quarter was $309 million, or 13% of sales. Our results were supported by a favorable mix on a number of key platforms and a solid dollar contribution. As always, our continued focus on operational efficiency contributed to our margin performance during the quarter. So 2026 is off to a good start. Chris will provide more details about our overall financial performance during his prepared remarks. Let me now talk about some business updates, which you can see on slide four of our presentation deck. In the quarter, the company received approximately $21 million in net proceeds from the completion of a sale of a Dow Lay's cylinder line of business. We will continue to assess and optimize our current product portfolio to align with our core business and enhance our growth prospects and our long-term profitability. We also want to highlight our recent award from Cherry J Tour to supply PTUs and RDMs on a derivative model that we already support. The start of production is scheduled for later this year and will run beyond the 2030 timeframe. We continue to see positive momentum on this platform as the SUV product is resonating very well with Chinese consumers. In addition, we have been awarded a business extension for a major truck platform in Brazil with a lifetime revenue of over $750 million, which is scheduled to launch later this decade. Additionally, we received contract extension awards with multiple customers, and as OEMs evaluate their respective long-range product plans, business extensions have become a theme in the industry. We also earned numerous SideChat business wins, including replacement and new business with six different global OEMs. Furthermore, our metal forming business unit continues to realize wins across multiple product families, from our forging to our powder metallurgy, in part due to benefits from both onshoring and reshoring efforts to the US. Our strategy to become a leading global driveline and metal forming supplier is unfolding as expected. Next on slide five, I'd like to provide an update on our acquisition synergies and value capture. After approximately three months into operating as a combined company, we have already realized 35 million of run rate savings to date representing excellent progress. We are benefiting from the pre-work that was completed before the deal closed. Out of the gate, we mainly attacked overlapping corporate, SG&A, and some procurement costs. While there is much work ahead of us, we have a strong team in place and are encouraged by our momentum and the progress to date to achieve our year-end target run rate savings of greater than $100 million. And as we have previously communicated, we expect to deliver 180 million in run rate savings by the end of year two, and a full 300 million in run rate savings by the end of year three. Now let's talk about the industry. Currently, global geopolitical risks remain an overhang on our industry, especially the Iran conflict, which is driving elevated oil, energy, and gas prices. However, in the first quarter, we did not see a significant impact on our operations or customer schedules. That stated, over the long term, elevated fuel prices could impact us through higher energy, logistic, and transportation expenses, as well as certain petroleum-based input costs such as lubricants. Clearly, we are closely monitoring these developments and would look to mitigate any impact over time. In the near term, our customer schedules remain stable and consumers appear to be resilient. As always, we will remain focused on the matters that we can control and will proactively make necessary adjustments to market fluctuations. Now let's talk about our full-year guidance. We have revised our outlook by raising our sales and adjusted EBITDA, reflecting a combination of factors, including our strong first quarter performance while balancing the macro risk that I just mentioned. The company is now targeting sales of 10.3 to 10.8 billion, adjusted EBITDA range of approximately 1.3 to 1.425 billion, and adjusted free cash flow of approximately 235 to 325 million. Our guidance ranges are underpinned by the following production assumptions. North America, production at 15 million units, Europe at approximately 16.7 million units, China at 32.3 million units, and overall global production at 91.4 million units. As you know, we use multiple data sources to derive our outlook, including forecasts for certain programs that are significant to our performance. We also note GM is transitioning to its next-generation full-size truck program and appears to be bullish on overall volumes as demonstrated by the planned opening of their Lake Orient assembly plant. In summary, we had a good first quarter. The integration of DALE is off to a strong start. Our synergy achievement is on track. We raised our guidance, although we are monitoring geopolitical and macro trends, and we're excited about our future, and we are built to perform. Now let me turn the call over to our Executive Vice President, Chief Financial Officer, Chris May, for the first quarter financial details. Chris?