World Kinect Corporation

Thank you for standing by and welcome to World Connect Corporation's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. To remove yourself from the queue, you may press star 1 1 again. I would now like to hand the call over to Elsa Ballard, VP, Investor Relations and Communications. Please go ahead.

Good evening, everyone, and welcome to WorldConnect's second quarter 2024 earnings conference call, which will be presented alongside our live slide presentation. Today's presentation is also available via webcast on our Investor Relations website. I'm Elsa Ballard, VP of Investor Relations and Communications. With me on the call today is Michael Kasbar, our Chairman and Chief Executive Officer, and Ira Burns, our EVP and Chief Financial Officer. Before we get started, I'd like to review our safe harbor statement. Certain statements made today, including comments about our expectations regarding future plans and performance, are forward-looking statements that are subject to a range of uncertainties and risks that could cause actual results to materially differ. Factors that could cause results to materially differ can be found in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission. We assume no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in our press release and can be found on our website. We will begin with several moments of prepared remarks, which will then be followed by a Q&A period. I would now like to introduce our Chairman and Chief Executive Officer, Michael Kaspar.

Thank you, Elsa, and good evening, everyone. While we face challenging market conditions in our land business this quarter, we remain focused on increasing our percentage of core recurring revenue activities and driving improved operating efficiency to deliver our medium-term targets, which we shared with you at our recent investor day. As I've highlighted over the prior few quarters, our management team's focus is on building a more rateable and leverageable business model across all of our businesses. Aviation is a great example of this. Our aviation business continued to deliver strong performance and has excellent momentum heading into the second half of the year. Our optimized scale platform provides consistently high operating margins, and we continue to demonstrate our value to customers around the world in both business and commercial aviation. Aviation generated a very strong operating margin in the second quarter and continues to be a model of efficiency. Advancing our objective of sharpening the portfolio, the strategic divestiture of the Avanode business within the quarter further enhanced our liquidity, and created economic value well beyond what we were able to achieve by retaining the business in our portfolio. This was followed by a tuck-in acquisition in business aviation that we signed today. This transaction will expand our bulk fuel distribution network by adding nearly 300 customers, including 100 FBO locations. Our market-leading business aviation distribution platform will be able to bring additional supply and solution capabilities to these locations, as well as outstanding customer service and comprehensive operational support. While not initially a significant earnings contributor, this acquisition is an example of the type of synergistic and strategically complementary deals we will continue to seek. While not at the rateability of aviation, and while results were down year over year, Our marine platform remains highly efficient and working capital light. Because marine is more of a spot business, it can deliver outsized results when market conditions are favorable, but creates value even in less beneficial environments. It is a consistent cash generator with minimal capital requirements and significant potential upside. We continue to appreciate the diversification and return profile of this business. Land is clearly where we are highly focused on building similar efficiencies. Unfortunately, in the second quarter, we experienced an unusual situation in which a number of our market forces negatively impacted several parts of the land business. Ira will cover this in more detail in his comments. We are actively working to grow and scale those parts of the land business that we believe are more rateable, have a better return, are less susceptible to market conditions and provide the best platform for increased operating leverage. Last week, I participated in a two-day management offsite with 50 of our key leaders. We focused exclusively on accelerating the transformation of our core U.S. land business. There is little doubt in my mind that we have assembled and organized the best team we've ever had with a clear focus on flexing the capabilities we have across the company and a sense of urgency to install the processes and tools necessary for growth and operating leverage. Before I return the call to Ira, I want to stress that we believe that improvements in our land business remains a critical element of meeting our medium-term financial targets. The land result this quarter was clearly a disappointment. but in no way alters our commitment to attain our investor day objectives or impacting the confidence in our ability to achieve these objectives. If anything, the result underscores the need to move more quickly. To reiterate, we are committed to consolidating our offers and reallocating capital to improve operating leverage. This is our number one management priority, and we will be updating progress towards this objective quarterly. Now I'd like to thank our fantastic global team for their consistent dedication to our business. Your passion for what we do shows, and in an uncertain world, our customers, suppliers, and partners know that they can rely on us, as they have for nearly 40 years. Thanks for listening, and now Ira will give a financial and detailed business update.