Kimbell Royalty Partners LP

Good morning, ladies and gentlemen, and welcome to the Kimball Electronics first quarter fiscal 2026 earnings conference call. My name is John, and I'll be your facilitator for today's call. All lines have been placed on listen-only mode to prevent any background noise. After the completion of the prepared remarks from the Kimball Electronics leadership team, there will be a question and answer period. To ask a question, simply press star, then the number one on your telephone keypad. Today's call, November 6, 2025, is being recorded. A replay of the call will be available on the Investor Relations page of the Kimball Electronics website. At this time, I would like to turn the call over to Andy Regret, Treasurer and Investor Relations Officer. Mr. Regret, please begin.

Thank you, and good morning, everyone. Welcome to our first quarter conference call. With me here today is Rick Phillips, our Chief Executive Officer. and Jana Kroome, Chief Financial Officer. We issued a press release yesterday afternoon with our results for the first quarter of fiscal 2026, ended September 30th, 2025. To accompany today's call, a presentation has been posted to the investor relations page on our company website. Before we get started, I'd like to remind you that we will be making forward-looking statements that involve risk and uncertainty and are subject to our safe harbor provisions as stated in our press release and SEC filings. and that actual results can differ materially from the forward-looking statements. Our commentary today will be focused on adjusted non-GAAP results. Reconciliations of GAAP to non-GAAP amounts are available in our press release. This morning, Rick will start the call with a few opening comments. Jana will review the financial results for the quarter and guidance for fiscal 2026. And Rick will complete our prepared remarks before taking your questions. I'll now turn the call over to Rick.

Thank you, Andy. And good morning, everyone. I'm pleased with the results for the first quarter and start to the new fiscal year. Sales were in line with expectations driven by strength in the medical vertical. Margins improved year over year. Cash from operations was positive for the seventh consecutive quarter. And debt at the end of Q1 was the lowest level in over three years. We have ample liquidity to navigate the current operating environment. and plenty of dry powder to opportunistically invest in growth. I continue to be impressed with our team's progress in positioning the company for the future. Our solid footing as an EMS provider and our capabilities as a medical CMO are unique in the industry, and we look to expand upon them through organic and possibly inorganic channels. We remain confident this powerful combination will result in return to profitable top-line growth next year and we are reiterating our guidance for fiscal 2026. Turning now to the first quarter, net sales for the company were $366 million, a 2% decline compared to Q1 fiscal 25. From an end market perspective, strong results in medical were offset by declines in automotive and industrial. Starting with medical, sales in the first quarter were $102 million, up 13% compared to the same period last year, and 28% of total company revenue. Nearly half our medical sales were in North America, the other half roughly split between Asia and Europe. The increase in Q1 was driven by robust sales growth of approximately the same amount in both Asia and Europe, while North America was up mid single digits. We expect the growth to continue as we lean further into the medical space. with production capabilities beyond electronics and printed circuit boards, expanding into higher-level assemblies and finished medical devices. Our new medical facility in Indianapolis will add capacity for manufacturing medical products, single-use surgical instruments, and drug delivery devices such as auto-injectors. This is also where we are focusing our efforts on inorganic growth, potentially adding new end markets, customers, or even new geographies. We continue to view the medical market as a compelling opportunity to diversify revenue and leverage our core strengths as a trusted partner in a complex and highly regulated industry. Particularly as the population ages, access and affordability to healthcare increases, medical devices get smaller in size and require higher levels of precision and accuracy, and the adoption by patients and end users increases. Next is automotive. with sales of $164 million, down 10% compared to the first quarter of last year, and 45% of the total company. The decline in Q1 was driven by lower sales in North America, a result of the electronic braking program transferred out of Renosa in mid-fiscal 25, and a decline in Asia. This combined impact was partially offset by strong sales growth in Europe, as the new braking program in Romania continues to ramp up. Longer term, we expect return to growth in this vertical, particularly as new systems and technologies such as steer-by-wire and brake-by-wire, or electronic mechanical braking, continue to increase the electronic content being added to vehicles. Finally, sales in industrial totaled $100 million, a 1% decrease compared to Q1 last year, and 27% of total company sales. Our industrial business is heavily concentrated in North America, And the decline this quarter was in the low single-digit range, where we are seeing softening demand for HVAC driven by the slowing housing market. Europe, which is a much smaller business for us, was down more significantly, while Asia reported strong sales growth in Q1. Before I turn the call over to Jana, I would like to provide a brief update on tariffs. As you know, beginning in February 2025, the U.S. implemented tariffs on a variety of countries and commodities. the global tariff landscape is evolving at a rapid pace with changes impacting businesses and markets around the world. While these increased tariffs have and may continue to impact end consumer demand, we expect that we will recover the tariff costs by passing them on to our customers. If we're unable to fully recover these costs, our operating results and cash flows could be adversely impacted. We are working closely with manufacturing constituents and lawmakers to address the challenges real time. As we monitor the progression of tariffs, reciprocal tariffs, and the geopolitical economic environment broadly, we are committed to profitability and expect to incur additional restructuring costs over the course of the fiscal year as necessary. I'll now turn the call over to Jana for more detail on Q1 and our guidance for fiscal 2026. Jana?