Stoneridge, Inc.

Welcome to the Stonebridge first quarter 2026 earnings call. At this time, all participants are in the 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 and then one on your touchtone phone. To withdraw a question, you may press star and then two. Please note this conference is being recorded. I would now like to turn the conference over to Kelly Harvey, Director of Investor Relations. Thank you and over to you.

Good morning, everyone, and thank you for joining us to discuss our first quarter 2026 results. The release and accompanying presentation was filed with the SEC and is posted on our website at stoneridge.com in the investor section under presentations and events. Joining me on today's call are Natalia Noble, our President and Chief Executive Officer, and Bob Hartman, our Interim Chief Financial Officer. Before I begin, I would like to inform you that as a result of the sale of its control devices business segment on January 30th, 2026, the company has applied the provisions of discontinued operations accounting guidance and has retrospectively presented the financial results of the control devices segment as discontinued operations and the accompanying presentation for all periods presented. Additionally, in connection with the retrospective presentation of control devices as discontinued operation, prior period segment information has been recast to conform to current period presentation. More information on the basis of presentation will be included in the Form 10-Q, which will be filed with the Securities and Exchange Commission. During today's call, we will be referring to certain non-GAAP financial measures. please see slide two of the presentation for a more detailed description of these non-GAAP measures and the appendix for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. In addition, certain statements today may be forward-looking statements. Forward-looking statements include statements that are not historical in nature and include information concerning our future results or plans. Although we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subject to risks and uncertainties and actual results may differ materially. Additional information about such factors and uncertainties that could cause actual results to differ may be found on page three of the presentation and in our form 10Q under the heading forward-looking statement. After Natalia and Bob have finished their formal remarks, we will then open up the call to questions. And with that, I will hand the call over to Natalia.

Thank you, Kelly, and good morning, everyone. It is a privilege to speak with you today in my first earnings call as president and CEO, and at a time when our industry is being fundamentally transformed with continuous shift to automation and connected vehicle technologies, as well as focus on advanced safety and vehicle efficiency. Our product portfolio is directly aligned with this transformation and represents significant growth opportunities. Now turning to the first quarter, let me begin on page four. This quarter marks the next phase of our long-term strategy as we advance our key priorities to drive shareholder value. We made progress through disciplined execution, improved manufacturing and quality performance, net-tariff-related recoveries, and organization-wide cost control. More specifically, compared to the fourth quarter of prior year, First quarter adjusted gross margin expanded by 400 basis points and adjusted operating margin improved by 180 basis points. This resulted in adjusted EBITDA of $2 million, which exceeded our previous expectations of approximately break-even EBITDA performance. European commercial vehicle market is at late cycle normalization and transitioning to moderate growth while North American market remains at the bottom of the production cycle with signals of recovery. Although we see the first positive signals in this end market, macroeconomic and geopolitical headwinds continue to persist. That said, our first quarter revenue grew by 9.2% compared to the fourth quarter of prior year. This resulted in market outperformance compared to our weighted average OEM end markets which declined by 9.1% over the same period. As previously announced, Millerite set another quarterly sales record, generating $33 million in sales, an increase of 11% compared to the fourth quarter of 2025. Similarly, StoneRidge Brazil OEM sales continue to grow as our local business accelerates, resulting in first quarter sales growth of more than 54%, and our off-highway sales improved compared to the fourth quarter as well. As previously mentioned, adjusted gross margin improved by 400 basis points compared to the fourth quarter. This demonstrates progress on our excellence in execution initiatives, and in particular, company-wide quality improvement, manufacturing productivity, and research-related recoveries, including agreements with customers and the benefit of the tariff refund process. We remain committed to driving structural cost reduction by streamlining our SG&A costs to more effectively support our company's current structure and are on track with our commitment to reduce costs by at least $5 million this year. Our priority is delivering outstanding value to customers while collaborating with all of our partners to advance next-generation technologies for safer and more efficient transportation. We are excited to announce two major business awards, totaling approximately $135 million of estimated lifetime revenue. First, we are announcing an award for an OEM-integrated Mirai program with our fourth North American customer. We now have OEM programs with all four major class 8 truck manufacturers in North America. Second, we are announcing a next generation electronic controls program for a global off-highway manufacturer in Europe, representing the increasing demand for integrated intelligent systems. Both of these awards highlight our ability to deliver reliable, high-performance solutions for our customers and build on our already strong backlog of growth products. I will provide more details on this award later on the call. Additionally, we are reaffirming our base full year 2026 guidance. However, we are adjusting revenue and operating guidance ranges for the incremental impact of contract manufacturing associated with the sale of control devices. Bob will discuss this guidance update in more detail later on the call. Turning to slide five. I've just mentioned both the European and North American commercial vehicle end markets remain at low production levels. Europe went through a downturn by significantly milder than North America, and the market is expected to normalize this year. North America, however, went through a deep down cycle, and now we see early signs of recovery in tracking demand and order intake growth. At the time of our fourth quarter call, IHS production forecasts were indicating growth of 7.1% for our weighted average OEM end market. As you can see from the charts on slide five, updated IHS production forecasts have now been reduced and are now indicating that our weighted average OEM end market will grow by just 1.8%. These updated forecasts are now more in line with our initial full year 2026 guidance expectations. Although we see the first signs of recovery in this end market, especially for the second half of this year, inflationary pressure and geopolitical headwinds continue to persist. Turning to page six, NeroLite continues to gain momentum driven by increasing market acceptance as well as the continued ramp up of recently launched programs in North America. At the same time, we are executing on new business opportunities with key strategic OEM customers as evidenced by our new program announcement with the fourth major OEM in North America. As already mentioned, first quarter MirrorEye saved set yet another quarterly record with $33 million. This represents 11% growth compared to the first quarter of 2025 and 32% year-over-year driven largely by our European OEM program with continued strength in market penetration and take rates supported by our customers' focused marketing of this best-in-class innovative technology. Complementing this growth is a continued ramp-up of recently launched OEM programs in North America. While program ramp-ups remain in the early stages, we are seeing increased order strength and continue to receive positive feedback from the market. As we pass through the ramp-up phase, We are focused on engineering optimization that will allow us to benefit from platform approach while adding product features at the same time. With volume increase and maturity gain, we will also see higher capacity utilization and material cost improvement through supply chain optimization. By executing those key activities, we can fully realize the value of our technology. In addition to strong commercial performance, and as previously announced, Stone Ridge has now surpassed 150,000 mirrorless systems produced globally, marking a major milestone in the system's lifecycle. This achievement reflects the growing confidence of OEM partners and fleet operators, as well as Stone Ridge's ability to scale production while maintaining the highest standards of quality and reliability. Reaching 150,000 systems is more than a production milestone. It's a testament to the trust our customers place in MirrorEye every day. As adoption accelerates, we remain focused on continuous innovation and production efficiency. Building on our momentum and success of the MirrorEye platform, we are excited to announce that we have been awarded the OEM Integrated CMS Programme with yet another major North American Class 8 truck manufacturer. As announced last year, we began offering our standard version as an option on the current heavy-duty truck model. Through continued strength of this customer relationship and the trust we've built to create a foundation for continuous collaboration, we were awarded the custom program based on our next generation camera monitoring system. This program is expected to launch in 2028 with estimated lifetime revenue of approximately $70 million and estimated peak annual revenue of approximately $20 million. We now have Mirai programs with four major OEMs in North America, resulting in significant market share. Mirai and our strategy to create long-term growth for the platform is paying off with additional business awards and expression across the global OEMs. We are deploying the resources necessary to optimize this growth platform and create long-term value for our shareholders. Turning to slide seven, in addition to MirrorEye, we continue to win new programs in our other key product categories. As part of our strategy to expand our electronic control business, we secured a business award for a next generation control program with the leading global off-highway vehicle manufacturer in Europe. Replacing our current generation control, this program will deliver upgraded products for the main electronic units on several construction equipment platforms, including wheel loaders, articulated haulers, and excavators. The program is expected to launch in the first quarter of 2028 and is projected to generate total lifetime revenue of approximately $65 million with estimated peak annual revenue of approximately $15 million. This replacement business with a longstanding strategic customer reflects our ability to consistently deliver exceptional customer service and reliable high-performance solutions to our customers. As the commercial vehicles are moving towards software-defined vehicles architecture, We are prepared to enable this transformation with our scalable ECU platform products. We expect this award to continue to position us for future business wins. Sonridge remains focused on consistently delivering innovative, next-generation solutions that meet our customers' evolving needs. And with that, I will turn the call over to Bob for the financial update.