Good day, and thank you for standing by. Welcome to the Exco Technologies Limited 2022 second quarter results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star and then the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Darren Kirk, Chief Executive Officer of Exco Technologies Limited. Sir, please go ahead. Thanks, Rachel. Good morning, all participants. Welcome to Exco Technologies Fiscal 2022 second quarter conference call. I am Darren Kirk, CEO of Exco. I will lead off with an operations overview. Matthew Posno, our CFO, will then review the financial results before we open the call for questions. Before I begin, I would like to make some comments about forward-looking information. In yesterday's news release and on page 2 of the presentation that we have posted to our website, you'll find cautionary notes in that regard. While I won't repeat those contents, I want to emphasize that they apply to the discussion today. Our revenues held up fairly well in the quarter and in fact showed modest growth year-over-year, despite lower overall vehicle production volumes in our core markets of North America and Europe. However, it was a challenging quarter, with extreme macroeconomic factors negatively impacting our operations and results. Nonetheless, we recorded consolidated revenues of CAD 119 million and earned CAD 0.13 per share. Given all the headwinds we faced, I think our results were actually pretty decent. This speaks directly to the strength of our businesses and of course, our very talented and dedicated team members. Lower vehicle production volumes due to supply chain disruptions was certainly a contributing factor to our reduced profitability this quarter. In particular, this hurt our European parts business, but also our North American tooling operations through continued inventory destocking in the die-cast channel. As well, US vehicle sales were also about 16% lower year-over-year, which negatively impacted some of our accessory products in the Automotive Solutions segment. Of course, widespread inflationary pressures, labor disruption to prevent the greater spread of the Omicron variant, and logistical constraints all contributed to margin compression. While the quarter was again challenging, it is worth noting that our results improved significantly from the first quarter. As I indicated in our last call, nothing has changed fundamentally for Exco or our medium-term outlook, despite current macro conditions. We continue to expect much stronger results in the quarters ahead. By this point, I think the constrained supply of microchips impacting the OEM's ability to manufacture vehicles is well understood. There has been an improvement in this constraint in recent months, and most industry players expect supply will continue to improve as we go through 2022. IHS, for example, is anticipating an 8% increase in combined North American and European production volumes in 2022 and a further 11% in 2023. I've mentioned several times before that the automotive industry's transformation towards electric vehicles and focus on reducing emissions is extremely positive for Exco's tooling business. As OEMs make the change to greener vehicles and strive for greater manufacturing efficiency, there is an increased use of light metals and a demand for our associated tooling. There is also increasing demand for technical expertise at the supplier level as products become larger and more complex. In addition, there is a heightened focus on efficiency by all manufacturers for sustainability initiatives, including a trend towards reshoring, all of which will be very positive for the entirety of our tooling business. In anticipation that these trends will continue to take hold, we are making sizable investments to better position our various businesses to capture the expected growth. To summarize, these investments include a new tooling plant for Castool in Morocco, which opened in November 2021 to better serve the European extrusion and die-cast markets. Another new facility for Castool in Mexico, which recently broke ground to add incremental capacity within Mexico and the Southern U.S. Significant investments in heat treatment equipment across the entire tooling group to enhance capacity, reduce emissions, and enable us to insource most of our needs. Investments to upgrade the capabilities of our large mold group to handle molds of extreme size, which we expect will be increasingly demanded by all OEMs. Additional equipment for our 3D printing tooling business, which continues to see strong growth. Additions to two of our production facilities in the Automotive Solutions Group to provide much-needed capacity for awarded programs. As a reminder, our total CapEx budget this year exceeds $50 million and covers these and several other growth initiatives. We again made great headway on advancing these projects during the quarter. Now just a few comments on our exposure globally, given the significant macroeconomic developments in the last few months. First, as it relates to the Russian invasion of Ukraine, we have no material direct exposure to either country on the supply or customer side. There obviously is indirect exposure across the industry as supply chain constraints in the Ukraine is negatively impacting European vehicle production volumes given its proximity to the conflict. As well, developments from this situation are causing further challenges and increases in global inflationary conditions. Next, looking at the recent COVID lockdowns in China, we again see limited direct impact to our operations. We source very little raw material and other components out of China, particularly in our Automotive Solutions group. Where we do have exposure, we are adding some buffer stock to mitigate against adverse developments. With respect to our tooling group, there is some exposure to certain die-cast components procured from China, and we have some alternatives outside China for many of these purchases. It is worth noting that our competitors generally have much greater reliance on China than we do. Turning to the quarter, first looking at our Automotive Solutions segment, overall industry vehicle production volumes in North America were down very slightly, while volumes in Europe were down 18% year-over-year. Nonetheless, our segment revenues were essentially flat year over year, with our sales outperforming industry production in both regions. New program launches contributed to our results this quarter, including one key new program where we are supplying sizable content on a fleet of commercial EV vans. This program will begin to ramp up more significantly in our third fiscal quarter and continue for several years. Moreover, we will continue to ramp up several other key programs through 2023 that will provide outsized growth relative to our historical performance. Revenues were also helped by certain pricing actions taken to protect margins, as well as favorable vehicle mix, with these trends generally improving through the quarter. Meanwhile, quoting activity and new program awards remained very decent and actually picked up a bit through the quarter. We are seeing a number of sizable new opportunities, particularly with electric vehicles from both new and established OEMs. On the cost side, our margin suffered from higher input costs as well as unfavorable product mix during the quarter. Extra costs associated with carrying surplus labor in anticipation of higher demand levels also impacted our results. Compounding these issues were fluctuations in forecast versus actual order releases. This occurred as our customers juggled their own production schedules in response to the chip shortage issue and other constraints, particularly in Europe. These challenges were pushed down to the supply base and placed strain on our own production planning process. Moreover, raw material cost increases remained a factor, and we faced various supply chain and labor availability challenges of our own. These elements required us to be nimble and also absorb a lot of extra costs related to overtime, material substitution, and expedited freight. Pricing remains tough in this business, and there is limited ability to use price as a lever. We did, however, take pricing action where possible to recover higher input costs, and we began to see the impact of these prior actions this quarter. We expect this trend will continue to be evident in the quarters ahead. In our Casting and Extrusion segment, it was a mixed bag. Demand for extrusion-related tooling and equipment remained quite strong, while die-cast has been weak due to lower industry vehicle production volumes combined with inventory destocking in the supply chain. Our extrusion tooling ultimately supports a diverse range of applications, including residential and industrial building and construction, solar panels, consumer durable products, and various modes of transportation. This quarter, we again demonstrated we could keep up with sizable demand growth by utilizing equipment and labor more efficiently while leveraging the harmonized manufacturing process of our numerous group facilities. With regard to the latter, this initiative has allowed us to centralize certain processes, such as programming and design, and utilize our capacity on a network basis. All of this keeps our costs low, capacity high, and provides us with the ability to manufacture a quality product in a standardized manner. We are making significant strategic investments to further shrink lead times, drive down our operating costs, and insource more of our own heat treat requirements, all while reducing our environmental footprint. The die-cast market, which is driven by automotive production, however, remained soft in the quarter as lower vehicle production was magnified by inventory destocking. This negatively impacted demand for Castool's consumable die-cast tooling, while the large mold group suffered from greatly reduced rebuild work. Nonetheless, we achieved a number of program wins that will benefit future quarters. In fact, we achieved record levels of order intake in our large mold group, ending the quarter with pretty much the highest backlog in our history. We are very bullish on the long-term outlook of this business, given the growing demand for large and complex die-cast components, coupled with our leading market position, full-service capabilities, and view that supply chains will become more localized over time. As well, our additive tooling business continues to perform very strongly, contributing record levels of sales and order intake during the quarter. Additive tooling is a critical differentiator, providing us with an unmatched competitive edge. Looking at the Casting and Extrusion segment margins, we experienced weakness this quarter from levels that we have otherwise come to expect. Segment margins were impacted by unfavorable product mix, including essentially no revenue from rebuild work in our large mold segment. Rising input costs, higher freight charges, and labor disruption due to COVID were all a drag on our performance and outpaced ongoing efficiency gains. Front-end losses at Castool's new plant in Morocco added to the margin pressure this quarter, although we have started to generate revenue there. Lastly, with respect to our acquisition of Halex, Europe's second-largest manufacturer of extrusion dies, we continue to work towards closing the acquisition in the very near term. That concludes my operations overview. I will now pass the call to Matthew to discuss the financial highlights of the quarter. Matthew? Thank you, Darren. Good morning, ladies and gentlemen. Consolidated sales for the second quarter ended March 31, 2022 were CAD 119.3 million, compared to CAD 118.4 million in the same quarter last year. This is an increase of CAD 900,000 or 1%. Second quarter sales at our Automotive Solutions segment were down CAD 1.1 million or 2%, and the Casting and Extrusion group sales increased CAD 2 million or 4%. Over the quarter, exchange rate movements decreased sales CAD 1.5 million. Excluding the impact of foreign exchange rates, consolidated sales for the quarter were up 2%. Automotive sales were flat, and Casting and Extrusion sales were up 4%. Consolidated net income for the quarter was CAD 5.1 million, or basic and diluted earnings of CAD 0.13 per share, compared to CAD 11.7 million or CAD 0.30 per share in the same quarter last year, a decrease in net income of CAD 6.6 million. The consolidated effective income tax rate of 23% in the current quarter increased from 22% from the prior year quarter due to nondeductible losses from our recently launched Castool Moroccan facility. The Automotive Solutions segment reported sales of CAD 68.2 million in the second quarter, a decrease of CAD 1.1 million or 2% from the prior year quarter. This segment's second quarter sales were consistent with last year when considering the negative impact for foreign exchange rate fluctuations. Compared to IHS North American and European production volumes, the Automotive Solutions segment outperformed the industry. Segment sales were supported by a number of key program launches for both new and existing products and a favorable vehicle mix. Second quarter pretax earnings in the Automotive Solutions segment totaled CAD 6.2 million, which represents a CAD 3.2 million reduction from the prior year quarter. The segment's lower pretax profit was due to unfavorable market-driven product mix, higher material, logistics, and labor costs, partially offset by pricing actions which were taken in the quarter. Inflationary pressure continues to be a challenge in this segment, particularly on petroleum-based products, resins, plastics and rubber, energy, freight, and labor. Management remains focused on improving the efficiency of its operations and reducing its overall cost structure. Pricing discipline remains a focus, and actions are being taken on current programs where possible, though there is typically a lag of a few quarters before an impact will be realized. The Casting and Extrusion segment reported sales of CAD 51.1 million for the second quarter, an increase of CAD 2 million or 4% from the same period last year. Foreign exchange rate changes were negligible in the quarter, approximately CAD 200 thousand. Within the segment, demand for our extrusion tooling dies, dummy blocks, stems, et cetera, and associated capital equipment, die ovens and containers, remained strong due to both industry growth and ongoing market share gains. In the die-cast market, which primarily serves the automotive industry, demand has remained suppressed due to lower vehicle production volumes, which in turn is due mainly to broader supply chain constraints. Demand for Exco's industry-leading additive 3D-printed tooling has continued to gain traction as customers focus on greater efficiency as the size of the and complexity of die-cast tooling continues to increase. Sales were also aided by price increases, which were implemented mainly toward the end of the quarter in order to protect margins from higher input costs. The Casting and Extrusion segment reported $2.7 million of pretax profit in the quarter, a decrease of $4.7 million from the same quarter last year. The lower pretax profit was driven by reduced activity for rebuild work in the large mold group, coupled with the shipment of a number of new lower-margin molds. Profitability was negatively impacted by raw material and labor cost inflation before price increases were implemented. Unfavorable market-driven product mix shifts within the Castool group, startup losses of Castool's plant in Morocco, which opened in November 2021, reduced labor availability and higher overtime costs across three business units to reduce the spread of COVID-19. Segment pretax profitability was higher sequentially, and new business awards across the quarter are very strong, particularly for structural die-cast components in EV platforms. Exco generated cash from operating activities of CAD 5.3 million during the quarter and CAD 3.6 million of free cash flow after CAD 1.6 million in maintenance fixed asset additions. Cash flow, combined with cash on hand, our renewed and increased credit facility funded CAD 4.1 million of dividends, CAD 9.1 million in growth capital expenditures, and repurchased 1.8 million of shares under the normal course issuer bid. As reported in previous quarters, management expects total capital expenditures to be in excess of CAD 50-CAD 55 million as we continue our strategic capital growth programs discussed by Darren previously. Exco's financial position remains strong. The company's balance sheet and availability of the expanded credit facility allows considerable flexibility to support strategic initiatives like our Halex extrusion dies acquisition. Our strong financial position, combined with our free cash flow, creates a foundation for management to pursue high-value growth, capital expenditures, dividends, and other opportunities that may arise. That concludes my comments. We can now transition to the Q&A portion of the call. Rachel, please. Thank you, Matthew. As a reminder, to ask a question, you will need to press star and then the number one on your telephone keypad. Again, just press star and then the number one on your telephone keypad. To withdraw your question, just press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Miguel Ladeira from Cormark. Sir, please go ahead. Hey, good morning. Good morning. I just want to touch on the Halex acquisition. You previously mentioned that you saw a pathway to achieving around 20% margins. Do you see this changing given the European exposure, or would this just push these expectations out to the right? I'm assuming the business is being hit harder more than the legacy Exco. Sure. Thanks for the question. I don't think we've commented specifically with respect to Halex's margin, but certainly within Casting and Extrusion segment, we do have an expectation of achieving a margin of 20%. You know, the acquisition of Halex, as I mentioned when we announced the acquisition, would have a modest front-end compression to the EBITDA at the time, EBITDA margin at the time. We see no reason why, within our five-year timeframe for our 2026 targets, that we can't get the margin for the group or the segment back to 20%. You know, with respect to, you know, developments in Europe, you know, certainly, there's an increase in inflationary pressures there, perhaps of a greater magnitude than what we're seeing in North America. I will point out that what we've seen so far in terms of demand on the extrusion side, in Europe is that, there's significant demand as there is globally for those products. Just to clarify, is there any direct exposure from Halex with regards to Ukraine-Russia conflict? Not direct, no. Awesome. Thank you. Changing gears to legacy business, can you remind me how much capacity is coming online with the introduction of Morocco and then Mexico coming down the road? Sure. Well, what we've said when we built up our 2026 target is that we expect that those two plants together will provide annualized revenue of about CAD 30 million or so. You know, in fact, there's probably more upside to that than anything. I'd use that as a benchmark. Just a follow-up there. If we were to back out the one-time startup costs associated with Morocco, is there a figure you can point to? Typically, when we start these plants, there's a loss of, you know, $100,000 a month or so. But that, you know, quickly reduces as the revenue builds up. As we indicated last quarter, we'd expect to be kind of on an EBITDA breakeven toward the end of this fiscal year for the Moroccan operation. That's great. Last one for me. You touched on the IHS forecast in your opening remarks, but specifically, where do you see production volumes trending given your conversations with customers? Are they more or less in line with these forecasts, or do you have a more, I guess, optimistic/pessimistic outlook? Yeah. No, I'd say in line with IHS based on what we're seeing. Certainly, an improvement that should continue through the remainder of the year and beyond, but nothing too dissimilar from what IHS is saying. That's all for me. Thanks for taking the time. Thank you. Thank you. Our next question comes from the line of Peter Sklar with BMO Capital Markets. Your line is open. Good morning, Darren. Like in your auto parts business, the revenue number, the sales were exceptionally strong. You kind of gave a laundry list in the write-up, but do you mind just elaborating a little bit? Like, why was your top line like so above and beyond, you know, kind of where the production volumes were in North America and Western Europe? Sure. Well, I think, you know, generally, we have a track record of exceeding changes in vehicle production volume by 5-10 percentage points over time. As we've indicated, you know, we are launching a number of outsized programs that are contributing to our Automotive Solutions revenues at this point. That has started, and that will continue to pick up pace through the remainder of the year. You saw that growth in revenue from those elements. You know, the margin has improved sequentially. But there's a front-end cost to launching some of these programs too. You know, as these new programs continue to grow in season, we expect that we'll continue to outperform the market and outperform our 5-10 percentage points in outperformance of the market, you know, for the foreseeable future. The margin should also improve. Yeah. Okay. The other thing I wanna ask you about is, like this European extrusion acquisition you've done, Halex. Can you just talk a little bit like benchmark it against your North American extrusion? Like, how is their equipment, how is their technology, their know-how? I mean, are you gonna be learning from them, or are they gonna be learning from you? You know, do they do heat treatment? You know, all of those things. Like how does it compare to the North American business? Sure. There's a lot of similarities, and there's also quite a few differences. We are the largest player in the Americas, by far. Halex is the second largest player in Europe. They build a very quality die. They have a significant technical expertise. I believe as Nick mentioned on the call when we announced the acquisition, we do see synergies going both directions here, from their know-how and our know-how and leveraging that. You know, I would say with respect to their equipment, our equipment is generally much newer and more advanced. We can't forget that Halex has been owned by private equity for the better part of 10 years. These, you know, owners were not strategic players, but financially motivated. As they typically do, they did not inject sufficient capital in the business to maintain modern equipment. You know, we see the ability to improve things from that angle. You know, we're excited to close this acquisition, which we expect to do in our third quarter, and get in there and start sharing the knowledge back and forth to our mutual benefit. Darren, one of the things I understand you've done at like the North American extrusion business over the years is you've centralized, you know, all your engineering and CAD work. So rather than each plant having that, you know, capability and cost structure, it's kind of centralized into one area. So if I'm describing that correctly, how is Halex? Like does each of their plants do their own work in engineering and CAD, or are they centralized it in the same way that you've tried to do here in North America? It's a bit of both, depending on the country. We are certainly more centralized with those functions today than Halex is. You know, we're not intending to. I mean, Halex runs a very good operation. It's not our intent to go in there and change things drastically on day one. It's a quality operation, and we'll look to improve things over time. Okay. Just lastly, do they have more or less auto exposure than your North American operations? I'm gonna say it's similar. You know, auto exposure as a percent of extrusion demands are probably somewhere 15%-20%, but growing strongly, and they would not be too dissimilar. I have one other thing. Sorry, Darren. The large mold die-cast business. You know, as you know, we're going to larger and larger molds, so you have to add equipment. What does that mean? That you have to add milling machines that can deal with larger molds? I wasn't too sure what that meant. Larger boring machines in particular, certainly, increase crane capacity. We're taking our crane capacity to 100 tons, and that will be installed next month. You know, those are primary elements. We're also in the back of our Newmarket plant installing large heat-treat equipment. We'll have the largest heat treatment equipment in North America after this install. It'll give us capabilities that the market's gonna require and don't currently exist. Okay. As I recall, at Newmarket, in the back, you have that one die-cast machine. So does that have to be replaced for a higher tonnage machine? No, not at this time. You know, we're not planning to install our own Giga Press, but that, you know, we, you know, who knows what the future looks like, but that's not currently in the cards. How does it work when you... Like, how do you run prototypes and, you know, run off- We don't have to sample and process, you know, all the molds that we deliver. You know, we have that function for many of the dies that we deliver, currently, but it's not a requirement in order to build a mold or complete a rebuild for a mold of an extreme size. How does that work? Like, do you outsource the sampling or the customer does the sampling? Oh, the customer would run it. Yeah. Okay, I get it. Thanks so much. We have engineers that go to the customer and, you know, participate in the process to set things up and we do it at the customer end. Okay, I get it. Thanks for your comments. Okay. Thanks, Peter. Thank you. Once again, if you have a question, just press star and then the number one on your telephone keypad. There are no further questions at this time. Speakers, please continue. Okay. Well, everyone, thank you for your time this morning. We look forward to speaking again next quarter. Take care. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.