Martinrea International Inc.

Good evening, ladies and gentlemen. Welcome to the Martin Rea International first quarter 2026 results conference call. I would now like to turn the meeting over to Mr. Rob Wildeboer. Please go ahead.

Good evening, everyone. Thank you for joining today. We always look forward to talking to our shareholders, updating you on our business, answering your questions. We also note that we have other stakeholders, including many of our employees on the call, and our remarks will be addressed to them as well. as we disseminate our results and commentary to our network. With me this evening are Pat DiRamo, Martin Reyes' CEO, our President, Fred DiTosto, and our CFO, Peter Cerullos. Today, we will be discussing Martin Reyes' results for the first quarter and in March 31, 2026. I refer you to our usual disclaimer in our press release and our filed documents. On this call, Pat will discuss operations and outline some key highlights for the quarter. Fred will provide an overview of our operating segments and highlight some new business wins and growth opportunities. Peter will discuss financials and 2026 outlook. And I will conclude with some comments on trade, geopolitics, and capital allocation. To kick things off, here's Pat.

Thanks, Rob. Good evening, everyone. Before I comment on the quarter, I want to take a moment and highlight what makes our company unique. Simply put, we're great operators. Many of our plants are some of the best plants I've ever seen in my time in the auto industry. This is demonstrated in our results with our margin profile at the upper end of our peer group. We have industry-leading safety record and our employee survey results demonstrate that our employees believe that this is a great place to work. Our customers view us as trusted partners with a great reputation for delivery and quality, as evidenced by many supplier awards that we have won, including the GM Supplier of the Year Award. These outcomes reflect disciplined execution across the organization, not one-time benefits. Innovation at Martin Ray is practical and execution-driven. Many initiatives originate on the plant floor and are scaled across the network. Our advanced manufacturing team continues to deploy machine learning solutions such as adaptive welding, press health monitoring, and vision systems, with PolyML providing the core intelligence behind these solutions. We're scaling these solutions across multiple facilities and making good progress. These initiatives are contributing to improved operating efficiency and our margin profile. We are also applying advanced manufacturing selectively to core product categories. We recently won an award at an additive manufacturing trade show called Rapid Plus TCT, which took place in Boston earlier this month for a product that we designed in partnership with Equispheres. It's essentially a heat exchanger that is a 3D printed into an electric motor housing. This is a great example of innovation taking place in Martin Rea Innovation Development that is strategic to our core business with direct applications to existing products. Another example is a new business we call True North Kaizen, which we kicked off at the beginning of this year. Eleven years ago, lean manufacturing was introduced as one of our key strategies to improve our operations and ultimately the bottom line. Recall that prior to the pandemic, this initiative was key in driving our adjusted operating income margin from 4% to just under 8%. I remember I was asked on one of my early earnings calls, How long will this lean thing take to implement? I replied, about 10 years to become embedded in our culture. Part of the process was to bring expertise from my days at Toyota. Recall, I was VP of Manufacturing at Toyota's largest plant before I moved to the supplier side. I worked with many colleagues at Toyota that had been at the company for 20, 30 years and that developed a great appreciation for the Toyota production system. We brought this skill set over to Martin Rea in 2015, as well as very strong subject matter experts. And for the last 11 years, Lean has become the standard operating procedure across the organization. We're well advanced on our Lean journey. We call it MOS, the Martin Rea Operating System. It is so well integrated into our plants that I can say with confidence that our operations are as good as or better than any supplier in our space. So what's the so what? About a year ago, a supplier came to us and asked if we would be willing to share our expertise because they were struggling to keep up with their customer, which was also a customer of ours, albeit a smaller one at the time. Long story short, after creating a roadmap and with the customer's blessing, the supplier asked us if we would acquire the operation and fix it as opposed to helping them fix it. That operation was Lyceon North America, now known as Martin Ray of Tulsa. In a matter of months, we have gone from a seven-day operation on four shifts to a five-day operation on three shifts. We improved throughput by 32% in this time frame. And while we were at it, we consolidated the footprint and have made 50% of the plan available for future business. Further improvements are continuing. We recognize we're pretty good at this. and we no longer rely on past Toyota employees to teach the masses. The masses have developed the internal capability to continuously perpetuate lean at Martin Rea. The maturation of this process has allowed us to establish a lean consultancy for customers outside of Martin Rea. We call it True North Kaizen. Almost immediately, we won our first contract with Valpel, a U.S.-based supplier of complex, high-performance components, primarily for the aerospace industry. More recently, we were able to land a significant job with a large aerospace defense company in the U.S. focused on increasing throughput of a key product. The good news here is that the new business will add to our bottom line in the first year. We are also confident that our success in this area could ultimately give us the inside track to manufacture aerospace or defense-related products in North America. I'm truly excited about the prospects of this business. And I believe that with our strong track record of execution, we will be able to create significant value for our shareholders over the long haul. Now on to the quarter. We're pleased with our performance in Q1, both operationally and financially. Adjusted operating income margin was up year over year despite lower production sales as we continue to drive operating improvements throughout the organization. Our first quarter results were a nice improvement over Q4, with adjusted operating income margin almost a full percentage point higher. We spoke on the last call about some commercial settlements that we are expecting to fall in the first half of this year. Discussions with our customer are advanced, and we expect to close these in Q2. We continue to successfully navigate through the impact of tariffs on our business. As we've said before, the vast majority of our parts that we export from Canada or Mexico into the United States are complying with the terms of the USMCA and therefore are not subject to tariffs. We do have some exposure as it relates to Section 232 tariffs on the derivative steel and aluminum products that affect some of our raw material inputs. The adverse impact is modest. and absorb our customers or otherwise mitigate it. As such, we do not expect any impact on our financial results from recent tariff changes. Overall, we've had a great start to the year, and we remain on track to meet our 2026 outlook. Peter will elaborate on our outlook later in the call. With that, I'd like to end by thanking the Martin Rea team for all their hard work and ongoing commitment to make this business better every day. And now, here's Fred.