Methode Electronics, Inc.

Good morning, ladies and gentlemen, and welcome to Method Electronics Q3 results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Terry, Vice President of Investor Relations of Method Electronics. Sir, the floor is yours.

Thank you, Operator. Good morning, and welcome to Method Electronics Fiscal 2022 Third Quarter Earnings Conference Call. For this call, we have prepared a presentation entitled Fiscal 2022 Third Quarter Financial Results, which can be viewed on the webcast of this call or found at metho.com on the investors page. This conference call contains certain forward-looking statements, which reflects management's expectations regarding future events and operating performance, and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Method undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Method's expectations on a quarterly basis or otherwise. The forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Method's filings with the Securities and Exchange Commission, such as our 10 and 10 reports. At this time, I'd like to turn the call over to Mr. Don Duda, President and Chief Executive Officer.

Thank you, Rob, and good morning, everyone. Thank you for joining us for our fiscal 2022 third quarter earnings conference call. I'm joined today by Ron Zumis, our Chief Financial Officer. Both Ron and I will have opening comments, and then we will take your questions. Let's begin with the highlights on slide four. Our sales for the quarter were $292 million. Helping ourselves by 9 million were successful premium freight cost recovery efforts. However, our automotive segment encountered demand headwinds in Europe due to the ongoing supply chain disruptions, particularly the semiconductor shortage, leading to various European auto OEM production slowdowns. In our industrial segment, we saw strength across all our product categories, but particularly in power and lighting products. In particular, the segment saw growth in electric vehicle bus bars, commercial vehicle lighting, and radio remote controls. These products continue to benefit from the macro growth trends in electrification, e-commerce, and automation. As such, our industrial sales again outgrew our automotive sales, a trend we expect to continue. As I mentioned, our team continued to face the ongoing supply chain challenges in the quarter. They have worked diligently to mitigate these challenges, which required remedial actions such as expedited shipping and premium component pricing. We have worked relentlessly with our customers to share in the absorption of these increased costs, particularly with the premium freight. In addition, we've taken the proactive step to consolidate an operation into another existing facility in response to these logistical challenges. We are confident that this action will help reduce some supply chain risk, improve customer service, and ultimately drive margin expansion. Ron will provide more details on this restructuring later in the call. On the order front, we had a very strong quarter with over $100 million in new program awards. Of these new awards, approximately 70% were for EV applications, and of the EV awards, a large majority were for power distribution products. I will provide more color on our new awards in a moment. Focusing on EV, last quarter we reported that sales into EV applications were 16 percent of consolidated sales. This quarter, EV sales were groomed to 19 percent of consolidated sales, a record for Method. Given our year-to-date performance with EV sales, we now expect that percentage will be in the high teens for the full fiscal year, up from our previous mid-teens guidance. Our EV activity continues to be fueled by growth in power distribution, where we leveraged over 40 years of expertise to supply power products to various EV OEMs. In the quarter, we further reduced debt and continued to return capital to our shareholders. While our debt was down to the lowest level since the Greycon acquisition, We did have an increase in net debt as we utilized a portion of our available cash to execute a $21 million share buyback in the quarter. We have now executed over $70 million of the $100 million stock buyback authorization since it was announced last March. Moving to slide five, Methode had a very strong quarter of business awards. The awards identified here represent some of the key business wins in the quarter, and represent over $100 million in annual sales at full production. As a reminder, the full launch timing of some of these programs could be anywhere in the range of one to three years from now. As you can see, the list is dominated by EV programs representing three-quarters of the dollar value. And within those EV awards, power products were the main focus with several bus bar programs and a battery disconnect unit program. One of those bus bar programs was a significant first win for Method with a large, established German automotive OEM. These EV awards, which are part of the skateboard of the electric vehicle, are expected to have a longer program life than traditional ICE programs, as the OEM will leverage their investment over multiple EV platforms and model or top hat refreshments. In non-EV automotive, we were awarded programs for several user interface applications, including HVAC switch bars, overhead councils, and parking brake switches. We also won awards for a motorsport headlamp and a micro-DPU for a telecommunications company. Overall, it was a very successful quarter for new programs that will drive organic growth in future years. To conclude, it was a well-executed quarter by a worldwide worldwide team, and despite some ongoing demand headwinds and supply chain challenges, we are still expecting to deliver strong organic growth for fiscal 2022. Looking beyond this fiscal year, our award pipeline continues to be strong, as evidenced by this past quarter, and puts Method on a path to deliver long-term results. At this point, I'll turn the call over to Ron, who will provide more detail on our third quarter financials.