Mohawk Industries, Inc.

good day and welcome to the mohawk industries inc first quarter 2023 earnings conference call all participants will be in listen only mode should you need assistance please signal a conference specialist by pressing the star key followed by zero after today's presentation there will be an opportunity to ask questions to ask a question you may press star then one on a touch tone phone to withdraw your question please press star then two Please note this event is being recorded. I would now like to turn the conference over to James Brunk. Please go ahead.

Thank you, Dave. Good morning, everyone. Welcome to Mohawk Industries' quarterly investor call. Joining me on today's call are Jeff Lohrbaum, Chairman and Chief Executive Officer, and Chris Walborn, President and Chief Operating Officer. Today, we'll update you on the company's first quarter performance and provide guidance for the second quarter of 2023. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include the discussion of non-GAAP numbers for reconciliation of any non-GAAP-to-GAAP amounts please refer to our form 8K and press release in the investor section of our website. I'll now turn the call over to Jeff for opening comments.

Thanks, Jim. For the first quarter of 2023, Mohawk's net sales were $2.8 billion, down approximately 6.9% as reported, or 5.9% on a constant basis, and our adjusted EPS for the quarter was $1.75. All of our businesses are adapting our strategies to a more challenging environment. We're managing our costs while investing for both short and long-term growth. We exceeded our earnings expectations with the businesses maintaining higher pricing and mix and flooring rest of the world outperforming the other segments. The commercial channel continues to be stronger than residential with home remodeling projects being postponed and new housing construction being impacted by higher mortgage rates. Our balance sheet remained strong, and we generated over $125 million of free cash flow. We strategically invested in new product innovation, enhanced merchandising, and customer trade shows to improve sales. We are continuing to reduce costs across the enterprise by enhancing productivity, streamlining processes, and controlling administrative expenses. Our customers remain conservative in their inventory commitments, and all of our operations are running at lower utilization levels, creating higher costs from unabsorbed overhead. We see increased competition as industry capacity utilization and input costs decline. In Europe, natural gas prices have dropped dramatically, though they remain at almost double the historical levels. We expect consumer spending to improve as wages rise, inflation slows, and energy costs fall. Our new product introductions provide more value options for budget-conscious consumers. In the US, limited supply, high interest rates, and persistent inflation have suppressed the housing market. Lower home sales and changing consumer spending habits are impacting the remodeling category. We are maximizing our commercial business with new introductions, marketing initiatives, and targeted promotions. In our other geographies, demand is similarly slowing with residential more affected than commercial. Though the Mexican economy faces challenges, our business there is holding up better, while Brazil slowed more with higher interest rates and reductions in consumer inventories. Our restructuring actions are on track in the flooring North America and flooring rest of world segments and should improve the results of our business. We are limiting our other capital investments to those providing significant sales, margins, and process improvements. We're expanding our constrained categories that have the greatest growth potential when the economy recovers. These include LVT, premium laminate, quartz countertops, porcelain slabs, and insulation products. We completed two acquisitions in ceramic in Brazil and Mexico that had combined sales of approximately $425 million, almost doubling our existing market share in those geographies. We are developing strategies to increase our sales by providing broader product offering and using combined brands to satisfy all price points. In each country, we're beginning to consolidate the businesses to reduce costs, improve efficiencies, and optimize production. We also continue to improve the small bolt-on acquisitions in Europe and U.S. that we completed last year. Despite falling energy prices, natural gas and electricity inflation remained a headwind in the first quarter, though our future results will benefit as lower costs flow through the P&L. Our sustainable strategy includes investments in both production of green energy from biomass, wind, and solar, which reduces both our expenses and our carbon footprint. Our two biomass energy plants lowered our costs and improved our results in the quarter. We also purchased some of our European energy at various times to reduce future cost volatility. Italian energy subsidies have been extended at reduced levels through the second quarter. I'll turn the call over to Jim for his review of our financial performance.