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 second quarter 2025 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 would like to turn the conference over to Callan Ferris, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on Finneas' Investor Relations website, including a slide deck that we'll be referencing in our remarks. We are also broadcasting this call via webcast. Joining us today are Brady Erickson, CEO, and Chris Groff, CFO. During this 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 filings. We caution listeners not to place undue reliance upon any such forward-looking statements. And with that, it is my pleasure to turn the call over to Brace.

Thank you, Kellen, and thank you, everyone, for joining us this morning. I will start with some overall comments on the second quarter and then provide some thoughts on 2025 and beyond. Chris will then provide additional details on our financials and discuss our 2025 guidance. We will then open the call for questions. Earlier this month, we celebrated the two-year anniversary of the spinoff from our former parent. We've accomplished a lot in that short period of time, expanding into new markets, establishing a strong foundation, refinancing our debt, and notably returning over $464 million of shareholders in the form of dividends and share repurchases. For all their hard work and dedication, I want to say thank you to our entire FINIA team. Now, our results in the second quarter highlight the strength and resiliency of our business in the face of a challenging and unpredictable environment. Before getting into the specific operating results and commentary, I want to highlight a few key messages from the quarter. We returned approximately $50 million to shareholders via share repurchase and dividends. Our balance sheet remains healthy. We're moving into new markets and winning new business, including conquests. We recently announced our first acquisition. Both segments performed well as we managed tariffs. And lastly, we were refining to a narrow 2025 guidance. Now let me discuss each of these in more detail. During the second quarter and for the first time since the spin, both aftermarket segment sales and fuel systems segment sales were higher on a year-over-year basis, albeit benefiting from favorable FX and customer tariff recoveries. It was still nice to see. Net sales in the quarter were 890 million, up 2.5% from the same period of the prior year. which included contract manufacturing or CMA sales. Excluding the impacts of foreign currency and CMAs that ended in 24, sales increased 1%. Both segments also had strong adjusted operating income performance. Aftermarket again over 16% and fuel systems returning above 10% to 11.5%. While the external environment continues to evolve, Our results reflect our strong operational execution, along with our diverse products, markets, and customers we serve, which drive more stable and predictable results. We reported adjusted EBITDA of $126 million with a margin of 14.2%, a 60 basis point year-over-year expansion. Our EBITDA margin expansion highlights the success of the actions we are taking, which include an increased focus on pricing, supplier cost savings efforts, and productivity improvements. Total segment adjusted operating margin was 13.4%, 120 basis point increase when compared with the second quarter of 2024. We are also starting to show solid progress on reducing our tax rate and have adjusted our expected range for the full year accordingly. Adjusted earnings for diluted share, excluding non-operating items as detailed in the appendix, with $1.27, up from 88 cents in the same period of the prior year. In an uncertain market, our performance in the first half was solid. Let me now provide a quick update on the impact of tariffs. Our strategy to source and produce in the same region where we sell to customers not only results in improved customer service, but also limits our exposure to tariffs. The diversification of our customer base and our geographic footprint puts us in an advantage position. To the extent we have direct tariff exposure, we believe we have substantially mitigated the current tariffs with customer price increases, tariff recoveries from OEMs, and supply chain initiatives. We still had a net headwind in Q2, but substantial progress has been made, and we expect further progress in Q3, including completing the necessary customer audits. As a reminder, The majority of our products produced in Mexico are USMCA compliant, and we continue to work with customers and look at our operations for ways to drive our compliancy higher. Our strong financial performance in the quarter is a testament to our team's disciplined execution in a highly dynamic environment. We remain nimble and focused on delivering positive revenue growth while managing costs in a deliberate manner and leveraging our global sourcing infrastructure could definitely respond to geopolitical and market uncertainties. Let us now move to slides five and six for discussion of new business wins. We continue to leverage our strengths, particularly during these uncertain times, offering our customers great products manufactured at state-of-the-art facilities, industry-leading SKU coverage, and order fill rates. Our well-recognized brands and high-quality products are helping us secure new customers and increasing share of wallet with existing customers. We are privileged to work with a diverse and innovative group of customers. Now let me highlight a few recent business wins on page five. New business award for gas direct injection or GDI fuel rail assembly and pump for a leading domestic Chinese OEM to be applied on new hybrid engine platform for multiple vehicle models within China and for a Brazilian market flex fuel E100 application. First GDI pump business with a leading North American OEM. A port fuel injection or PFI compressed natural gas injector for a major Indian OEM. Our first PFI application with this customer. Moving next to our aftermarket business, which is an important driver of sales. As shown on slide six, We're also winning both new business and expanding relationships with existing customers. We highlighted an aftermarket business win with a new diesel fuel injection service with major off-road equipment supplier in our earnings release. But as shown on this page, there were other key wins across product lines and geographic regions, including shared wallet gains with customers, growing our propulsion agnostic braking and suspension technology. The outlook is encouraging for non-discretionary aftermarket parts for the internal combustion engine market. According to industry reports, the average age of U.S. light vehicles increased by two months for the second consecutive year and rose to roughly 12.8 years, according to the same report. We're focused on leveraging our ability to offer a broad range of products for all makes and models, not only light passenger vehicles globally, but also light commercial trucks, medium duty trucks, and heavy-duty Class A trucks. Tariffs continue to cause uncertainty, but despite these challenges, we expect rational prices for our products from our customers. We remain committed to offering quality products and being a reliable partner. This, combined with exceptional value-added services, will continue to distinguish our company. Our expanded portfolio of innovative solutions has further diversified our end markets. As I mentioned on a previous call, we're now winning new business in the aerospace and defense industry, and we're actively pursuing additional opportunities across both military and civil aviation. To support this initiative, we recently exhibited at the Paris Airshow, our first time as an exhibitor. We are bringing our expertise for high-performance applications to this industry and are committed to becoming a long-term, high-value partner in the global aerospace supply chain. As a reminder on slide seven, our long-term strategy is to grow our CV industrial and aerospace OE business and aftermarket and service offerings, which currently account for 73% or roughly $2.5 billion of our revenues, while maintaining our light vehicle OE sales level at roughly $900 million through market share gains. Favorable long-term industry dynamics continue to bode well for the company and we're well positioned for sustainable top and bottom line growth. Now moving on to slide eight, capital allocation. Consistent with our capital allocation priorities to invest in our business for the long-term profitable growth, we invested $34 million in capital expenditures during the quarter. I'm also pleased that in June we announced our first acquisition with plans to acquire Swedish Elektromagnet Invest, or SEM, a 100-year-old leading provider of advanced natural gas, hydrogen, and other alternative fuel ignition systems, injector stators, and linear position sensors for the commercial vehicle and off-highway sectors. This strategic transaction brings together two industry leaders in alternative fuel technology. SEM also opens up adjacent market opportunities for us, as well as providing customers with a wider range of products and turnkey solutions. We will pay approximately $47 million for SEM, which is expected to generate approximately $50 million in annual revenue and approximately $10 million of annual adjusted EBITDA. We expect the transaction to close in the third quarter. Also on the capital allocation front, during the quarter, we returned $50 million to our shareholders, including $10 million in quarterly dividends and $40 million in share repurchases. We have $224 million remaining under the current repurchase authorization, and we expect to continue to look at what's best for our shareholders on a quarterly basis. Since the spinoff in July of 23, we have repurchased approximately 18.6 of the outstanding shares. We have a solid balance sheet with cash and cash equivalents of 347 million, and combined with our undrawn revolver, our total liquidity is approximately 850 million. Importantly, our net leverage ratio remained at 1.4, just under our 1.5 times target. Looking forward, global economic activity remains subdued, but we continue to perform well and are maintaining our full year outlook, which Chris will discuss in more detail. To wrap up, we're pleased with our solid first half performance and the momentum we carry into the second half of the year. This reflects the operational improvements we've made and continue to make throughout the business. Despite ongoing economic uncertainties, we are optimistic and encouraged by our team's execution. Looking to Q3, I look forward to another milestone when we compare our results to a clean numbers from Q3 of 2024, as we had substantially exited all TSAs and CMAs by then, along with all corporate costs being in place. With that, I'll hand it over to Chris, who will walk us through our Q2 results and discuss our outlook for the year. Chris?