AirBoss of America Corp.

All participants, the conference is now ready to begin. Good morning, ladies and gentlemen. Welcome to Airbus' third quarter 2023 financial results conference call. I would now like to turn the meeting over to Grant Shock, Co-Chief Executive Officer. Please go ahead, Mr. Shock.

Good morning, everybody, and thank you for joining us for the Airbus third quarter 2023 results call. For our agenda today, Chris Psikakis will start with a review of the operational highlights for the quarter and year-to-date, followed by Frankie Dilley, our CFO, who will discuss our financial results before we open the conference line to questions. Before we begin, I will remind listeners that our remarks today contain four important statements, including our estimates of future developments. We invite listeners to review the risk factors related to our business in our annual information forum, and our MD&A, both of which are available on CDAR Plus and on our corporate website. Also, we will discuss certain non-GAAP measures, including EBITDA. Reconciliations of these measures are available in our MD&A. And finally, please note that our reporting currency is in U.S. dollars. References today will be in U.S. dollars unless we indicate otherwise. With that, I will turn it over to Chris.

Thanks, Grant. Looking at our Q3 results as we move through the end of 2023 and into 2024, each of our three business segments maintained their focus on strong operational performance, capturing new growth opportunities, and making select capital investments while navigating the current economic and market challenges. Consolidated sales levels were a couple percentage points off the sales posted in Q3 of 2022, and gross profit was substantially higher due to a one-time inventory charge we took in the third quarter last year. After adjusting for this charge, our adjusted EBITDA and adjusted earnings showed reasonable improvement over last year's Q3 results. Importantly, we have generated free cash flow year-to-date in 2023 and have continued to reduce our net debt levels, which have declined by over $18.8 million to date in 2023. As expected, our business units are carefully monitoring current demand levels, which in aggregate are indicating reduced customer activity and order volumes. Within Airbus Rubber Solutions, demand within the first part of Q3 was soft and showed some recovery through the end of the quarter. Airbus Defense Group saw some contraction in customer demand from both its industrial and defense segments. And last but not least, AEP maintained strong traction and built on momentum from prior quarters, despite some of the early impacts of the UAW strike. Within each of our business segments, we have moved ahead with the implementation and, in some cases, expansion of the cost-cutting measures we announced at the time of our Q2 conference call. Looking more closely at our business segment activity, starting with ARS, for Q3 of 2023, we saw volumes decrease by 9.1% over the third quarter in 2022, with decreases across most of the sectors we serviced and a continued decline in tolling volumes. In Q3, we made the strategic decision to close our Chicago location, which you may recall was added to our portfolio of facilities when we purchased ACE Elastomer in 2021. We have now shifted our production to improve capacity utilization at our other locations, while continuing to meet the needs of our customers previously served from the Chicago location. This, as well as other cost-containment efforts, have allowed us to continue to invest in our production capabilities and continue our applied R&D in partnerships with our customers. A long-term priority for ARS remains focused on delivering growth through our position as a leading supplier, specialty supplier in North America, one with a valuable portfolio of specialty compounds combined with strong production capabilities. The ARS team is also focused on replacing the volume gap from tolling customers with more advanced, more consistent non-tolling volumes. Moving now to engineered products, or AEP, we have seen continued solid momentum in its activity levels and financial contribution. We have definitely seen some negative effects of the UAW strike on the production schedules of the OEMs and Tier 1 suppliers, but given our success in updating our main supplier agreements in late 2022 and early 2023, we saw higher year-over-year volumes in our SUV and light truck platforms. Looking forward, we remain very positive about the potential for AEP to increase its contributions to our financial results through 2023 and beyond, through our focus on expanding our client relationships, developing new products, and diversifying the sectors we operate in. Moving on to ADG, we announced in late July that due to delays in converting sales opportunities for our suite of survivability products, we made the strategic decision to implement a series of measures to reduce ADG's cost, streamline operations, and reduce ADG's break-even point metrics as we await new contract awards. Our focus during this process was to create a much closer alignment of the operating cost base within ADG and its ongoing level of business activity. The cost saving measures are expected to result in approximately $5 million in annual cost reductions once fully implemented. Through this process, it was also imperative for us to ensure that our ability to deliver against current and future supplier agreements remains strong, which I also believe we have accomplished. The ADG survivability platform remains fully capable to execute against current and future awards as recent evidence of the capabilities of ADG's product portfolio. In early July, we announced new contracts for Airbus, Molded Glove, and also our Bandelier line charge system. In addition, ADG received two new orders for Bunny Boots during the quarter. On a combined basis, these new orders have an aggregate value of approximately $34 million and demonstrate the diversity of ADG's lineup of survivability solutions. During the Q3 meeting of our Board of Directors, the decision was made to return our common share dividend to pre-2021 levels as part of our overall efforts to maintain our emphasis and recent progress on strengthening our balance sheet. Looking forward, we continue to see the provision of a dividend as part of our value proposition to our investors. We remain confident that our products, along with our production execution capabilities, continue to position us to deliver long-term value for our shareholders. I will now pass the call over to Frank for the financial review.