PHINIA Inc.

Good morning, my name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the FINIA third quarter 2024 earnings call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I'd like to turn the conference over to Kellen Ferris, Vice President of Investor Relations.

Thank you, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on FINIA's Investor Relations website, including a slide deck that we will be referencing in our remarks. We are also broadcasting this via webcast. Joining us today, Brady Erickson, CEO, and Chris Graup, CFO. call, we will make forward-looking statements which are based on management's current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC violings. And with that, it's my pleasure to turn the call over to Brady.

Thank you, Callan, and thank you to everyone for joining us this morning. I'll start with some overall comments on some key accomplishments in the quarter and provide a brief discussion of our third quarter financial performance. We'll provide additional detail in our financial review before we'll open up the call for questions. Our performance during the most recent quarter reflects the ongoing successful execution of our long-term strategy, the resilience of our business in challenging environments, and the strong operational performance of our team. This includes launching exciting new products, expanding our business in growing markets, and developing partnerships in our aftermarket segment. With respect to our P&L, I'm pleased to share another quarter of consistent results driven by the strength of our aftermarket segment, which accounts for about 42% of our sales, and the resiliency of our fuel system segment. This led to another strong quarter of adjusted free cash flow. Finally, we strengthened our balance sheet by replacing high-cost debt with new unsecured long-term notes. Exited all material contract manufacturing agreements, or CMAs, with our former parent, We have published our first sustainability report. Now moving on to the third quarter results, starting on slide four. Before I begin, one item of note. This is the first time we are comparing standalone quarterly financials on a like-for-like basis post-spin. During the third quarter, the macro environment remained dynamic as inflation, geopolitical tensions, and currency volatility persisted. Despite these range of factors, our third quarter financial results were in line with our expectations and reflect resilience and strong execution within our business segments. Lower fuel system sales were partially offset by strong aftermarket segment sales. In turn, net sales in the quarter were $839 million, down 6.4% from the same period of the prior year, or down 3.7% on an adjusted selling basis, which includes the CMA sales. As mentioned, we've now exited all material CMAs with our former parents. We reported adjusted EBITDA of $120 million, a 90 basis point year-over-year increase. This reflects growth and positive profit conversions in our aftermarket segment and solid performance in the fuel system segment. Combined with cost controls in both segments led to margin expansion. Despite the reduction in sales in fuel systems, There was no degradation in segment operating income. We also continued to build the right capabilities and strengthen our internal systems and processes. Our adjusted free cash flow remained healthy at $60 million. Our balance sheet remained strong with cash and cash equivalents of $477 million, up from $365 million at year-end 2023. And our total liquidity is approximately $1 billion when taking into account our undrawn revolver. This performance enabled us to return $85 million to shareholders via share buybacks and dividends. Now let's move to slide five. We leverage our proprietary research and engineering expertise to ensure we support what our customers value. This is, once again, clearly shown by our recent wins across product lines and geographies. Let me call out a few. Second product line win in the off-highway diesel market with an electronically controlled low pressure common rail injection system for compact diesel engines for use in excavators, forklifts, and generators. Conquest win in India's growing combustion market with a European automaker for a light vehicle GDI pump. A Conquest GDI system win with a US automaker for use in a high volume application for light duty trucks and luxury SUVs. And moving on to slide six, our aftermarket segment renewed our agreement with one of our largest global independent aftermarket customer groups, signed a first-time agreement with a major customer group in Europe, and signed a new agreement with a North American customer to expand cooperation into their business in Mexico. Our customers trust us to give them innovative quality products. In turn, we're forming deeper relationships with new and existing customers. The success we are having winning conquest business and expanding our aftermarket segment offerings is further evidence of our leading technology and trusted brands. Now let's move to slide seven for discussion of our capital allocation actions. We took steps in the core to further bolster our already strong balance sheet by replacing high cost debt with the issuance of 450 million senior unsecured notes due in 2032. We have now extinguished both our term loan A and term loan B loans. We've also amended our credit agreement, which, among other items, is now less restricted with respect to dividend payments and share buybacks. As shown on slide seven, given the lower rates, we're comfortable with targeting a net leverage of approximately 1.5 times. Additionally, during the quarter, we opportunistically repurchased 75 million of our outstanding shares, after the board increased our share repurchase authorization by 250 million. As of the end of the quarter, 188 million remains open on the total of 400 million share repurchase program. In total, we spent 212 million to repurchase approximately 5.3 million shares, or 11.2% of our original outstanding shares since our spin in July of 2023. We also paid a quarterly dividend of 25 cents per share. These actions are indicative of the company's commitment to returning value to shareholders and our confidence in our long-term growth potential. Our strong cash position highlights the efficiency and strength of our strategies and execution of our team. We will continue to be disciplined and balanced with our deployment of capital as we prioritize investing in the business to drive long-term growth. both organically and via potential M&A transactions, as well as returning cash to shareholders via opportunistic share buybacks and paying competitive dividends. The last topic I want to touch on today is ESG. As always, our goal is to grow and operate in an even more efficient, sustainable, and impactful manner. During the quarter, we published our first sustainability report, which highlights our 2023 sustainability performance. strategies, and initiatives. We encourage all of you to read the report, which can be found on our website. As a mission-driven business, we will continue to focus on profitable growth, creating long-term value for our stakeholders by living our values and continuing to embed corporate responsibility throughout our business. In summary, we are encouraged by the resilience of the business given the ongoing macro headwinds. Furthermore, we are pleased with the progress we made in strengthening our balance sheet as well as being a fully independent company. We are well positioned to capitalize on the growth opportunities that are still ahead. As such, we will continue to invest in these long-term strategies, leveraging our strong balance sheet and healthy free cash flow while maintaining disciplined expense management. This will allow us to continue to deliver value for our customers, invest in our employees, support our communities, and create attractive returns for our shareholders. With that, I'd like to hand it over to Chris, who will walk us through our future results and discuss our outlook for the year. Chris?