Good afternoon, everyone. My name's John Franzreb. I'm an Analyst here at Sidoti & Company. Our next presentation for the day is Methode Electronics, ticker MEI. For those who are not familiar with the company, Methode's a manufacturer of electronic components for the automotive, truck, and other industrial marketplaces. We are fortunate to have with us today CEO Jon DeGaynor and Vice President of Investor Relations, Rob Cherry. They'll do a presentation. Following the presentation, there'll be time for Q&A. Should you have a question, enter the Q&A section and I will direct it to the management. With that said, gentlemen, thank you for being here. The floor is yours. Good afternoon, everybody, and thank you for joining us today. I'd like to thank John and the Sidoti team for inviting us to the Small Cap Conference. I wouldn't be doing my job if I didn't remind you that our statements today are subject to safe harbor protection. For a complete summary of the disclosures, please see Methode's filings with the Securities and Exchange Commission. I'd like to start and take a minute to share the key messages that we presented during our last earnings call. These messages are still fresh, and I think they're important for you, who are getting to know the company, to take away from the presentation today. I think, let me start with saying not many companies can talk about a seventy-eight-year-old history, but Methode can. However, it also should be clear that all companies eventually go through periods of where the business must evolve to move forward, changing the solutions that it develops for customers, the way in which it produces those solutions, and the way in which the organization works as a whole. Methode is at such a point, and consequently, we are beginning a journey to transform the business in order to position it for long-term value creation. To do so, our first priority must be to successfully execute on the large pipeline of new programs that we are launching in the next two fiscal years. In fiscal twenty twenty-five, we have over 30 program launches that our customers are looking forward to, and in fiscal twenty twenty-six, we have another 20 programs to launch. Any organization that faces this level of launch intensity will have its capabilities tested. At Methode, we are relying on our history of execution and global collaboration to surmount these challenges. Simultaneous with these launches, we must immediately address, take actions to address our supply chain costs and drive efficiencies. With the help of some outside resources, we are pursuing a multifaceted approach to set the executional foundation for future success. At the same time, we're actively building the executive team, including a new CFO and a CPO, to support me and the leadership team to address these challenges. And lastly, despite headwinds in our markets, we are in a position to affirm our guidance for flat sales in fiscal 2025, followed by profitable organic sales growth in fiscal 2026. Our plan is to leverage Methode's strong foundation in order to reinvigorate and transform the business. But what does transform mean? Let me elaborate. To start with, transform means resetting performance. That includes improving our operational metrics, our cost focus, and our cost structure. It also means improving and building and growing our capabilities. That includes utilizing global best practices, improving our tools and systems, and driving standardization across the organization. And lastly, it means shifting our culture. That includes leveraging our global resources, acting with a sense of urgency, and rewarding performance. In short, this organization needs to earn the right to write the next chapter of Methode's history, and I'm quite confident that it will. When we turn to an overview of the company, Methode is a leading global supplier of custom-engineered solutions for applications in the transportation, construction equipment, and cloud computing end markets. Our fiscal 2024 sales were just over $1.1 billion. Approximately half of our business is in North America, with the other half in Europe and Asia. We operate the business via three segments of Automotive, Industrial, and Interface. From a solutions perspective, we view the business through our main applications of human-user interface, LED lighting, power, and sensors. Methode's journey as a company has lasted over seventy-five years. We have participated in the support of technology developments from the television to the space program, to advanced aerospace projects, and now to electric vehicles. Along the way, we have navigated multiple technological evolutions. We have survived, and we've prospered. We have every intention to flourish for another seventy-five years. We've invested in a global footprint with our headquarters in Chicago, Illinois, and we are vertically integrated in delivering to our customers in North America, Europe, the Middle East, and Asia. This cost-efficient footprint is strategically located in proximity to our key customers, in keeping with our make-where-we-sell strategy. On the next two slides, I'll briefly describe the technology solutions that drive Methode's business. User interface products include switches, consoles, and industrial remote controls that leverage growth drivers such as vehicle autonomy and automation, and worker safety. With the sunsetting of some of our integrated center console programs, this percentage of our total sales dropped from 51% in fiscal 2023 to 43% in fiscal 2024. Lighting products include forward and rear lighting, warning lights, and work lights that benefit from an increased focus on driver and vehicle safety. With the addition of Nordic Lights, this percentage of our total sales grew from 28% in fiscal 2023 to 35% in fiscal 2024. Power distribution products include busbars, high current connectors, and battery disconnect units that benefit from the significant growth in vehicle electrification and cloud computing. With the growth in EVs, this percentage of our total sales grew from 13% in fiscal 2023 to 17% in fiscal 2024, and is expected to grow further. The combination of our automotive pedigree and power distribution know-how has been a key differentiator and a competitive advantage to driving our growth in EVs. Sensor products include position, torque, and load sensors that leverage growth drivers such as e-bikes and vehicle safety. These products leverage our magnetoelastic and eddy current sensing technologies. Digital data includes copper-based transceivers that leverage growth drivers such as cloud computing and e-commerce, which require increased data bandwidth. Digital bandwidth, excuse me. These solutions are leveraged across multiple end markets, from automotive and commercial vehicle to data centers and industrial equipment. Our ability to expand these solutions to multiple markets has resulted in an enviable and diversified customer base of brand names and global companies around the world. With a shift from internal combustion engine vehicles to electric vehicles, Methode has a clear opportunity to grow our content. Building on our traditional scope of user interface, lighting, and sensor solutions, we have opportunities to notably increase content per vehicle via power distribution solutions. Our scope on EVs can more than double the content that we currently have on internal combustion vehicles. For fiscal 2024, we reported that EV applications were 19% of our total sales, and recently we provided an outlook of over 20% for fiscal 2025. Furthermore, since the beginning of our fiscal year 2021, we have won $771 million in EV awards. This award stream acts like a backlog of potential future business. Methode's combination of solutions is a winning formula in EV, and positions us well for continued growth in this exciting market. I'd like to further elaborate on our footprint. The architecture of an EV is generally divided in two parts: the top hat and the skateboard. The top hat is essentially the body of the vehicle and varies from model to model. The skateboard is the chassis or frame of the vehicle. As many of you know, this type of vehicle architecture is a game changer with EVs, as it can be standardized and leveraged across multiple models. On the top hat, Methode offers its traditional solutions of user interface, LED lighting systems, and sensors, along with by-wire controls for shifting, steering, and braking. When we think about the skateboard, this is where Methode leverages its unique combination of auto-grade manufacturing operations, and automotive pedigree, and our power distribution expertise to supply various busbars, connectors, battery disconnect units to the EV OEMs. Power distribution is where our largest content growth opportunity lies. Historically, our participation with power products on internal combustion vehicles was minimal. In EVs, it's quickly growing and is now over half of our product sales into EV applications. Consequently, Methode has a clear opportunity to incrementally grow our content per vehicle with the industry transition to EVs, and EVs are a definite growth, organic growth tailwind for Methode. In summary, we are beginning a journey to transform the business while positioning it for long-term value creation. Meanwhile, we are focusing intensely on executing over thirty program launches while taking immediate actions to address execution and costs. We simply need to return to better blocking and tackling, and then we can move forward with the discussion of the strategy. We are building an executive team, including a new CFO and CPO, to support these challenges, and we are affirming our guidance for flat sales in fiscal 2025, followed by profitable organic sales growth in fiscal 2026. To be succinct, our fiscal 2025 will be a year of transforming the business with the goal of returning the company to growth and profitability in fiscal 2026. Now, John, we can move to the Q&A portion of the program. Okay, thank you, Jon. If you have a question, please enter it in the Q&A section, I'll present it to management. I'd actually like to start with where you just left off, that being the thirty new program rollouts that are coming upon us. Can you talk a little bit about the risk to the rolling out of the new platforms? What are your biggest concerns? So certainly, John, there's stuff that is within our control from a concern standpoint, and that's just how well we launch our programs around the world, and that's where the execution and the team comes in. But then there's also the risk of adoption rates, and it's easy to get caught up in North American, the news in the U.S. with regard to EV adoption rates, but forget that we're delivering products for EVs in Asia and in Europe as well. So EV penetration rates, while a risk, are more focused in North American penetration than they are in Europe and in Asia. Question from the audience: Can you talk a little bit about how broad-based tariffs would affect you? So we have a, you know, obviously we have a global footprint that gives us the ability to work, and supply our customers from a regional basis. We aren't using just one manufacturing location to support our customers around the world. There is some risk on some components where tariffs might have an impact, but that's where our supply chain organization really is working to make sure that we're anticipating those challenges, and having the appropriate, both supply chain and manufacturing footprint to be able to support our customers in the regions where they're growing. You talked in your prepared remarks about some programs are going end of life. Could you break down that in greater detail, and what's the risk profile there? We've been, I think, pretty transparent, before my time and during the last earnings call with regard to the roll-off of a very large General Motors display program, and then a Tesla lighting program. Those two, from a risk standpoint, are largely done with that. I mean, the announcements were done multiple years ago, and the ramp up, ramp down is happening over fiscal 2025 and a little bit in fiscal 2026, as we talked about in the last earnings call. The risk from that standpoint, there isn't much risk as much as it's already factored into the ramp down. For those of you that are interested, take a look at our earnings call from two weeks ago, and look at slide 10 from that earnings call. Where we have the opportunity is really then with the ramp-up of these new programs that fills that revenue hole created by those two ramp downs, John. Can you use the capacity from those programs to fill the... Is it similar or? No, there isn't necessarily the ramp up of our new programs are much more on the power side than on the center console or lighting side. So no, we haven't been able to use that capacity. But, you know, particularly on the big GM program, that CapEx was absolutely amortized over the period of the program. Okay. A question about how should we think about normalized gross margins in 2025 and beyond, with a higher percentage of revenue coming from LED lighting and power distribution programs going forward? You know, from the standpoint of, once you get to a normalized gross margin, so when you take any sort of launch costs or inefficiencies from that first ramp up, we're quite confident with regard to the gross margins on the new programs, and that they should be accretive to where we are from a margin perspective once you get through the launch piece. Question from the audience: What's the path forward on growing the LED lighting business in the automotive segment? How will Methode not be squeezed by customers and competitors? We don't view, particularly as you look at forward lighting in the automotive space, that as a path of growth. This is one of those situations where, being very selective in where you spend your engineering efforts and where you spend your capital and picking the markets where you can win and where you can't. The forward and tail lighting, rear lighting in passenger car, particularly forward, has huge suppliers with very large investments that we're not gonna be able to provide a competitive advantage to win. So we're focused on doing a better job to support our customers on the commercial vehicle side and on the industrial side, ag and construction equipment side, and really use our core competencies and our engineering to drive value there, as opposed to penetrating into a market where we'll just be, really a me-too player and never really be able to differentiate ourselves. Some of the audience might not be aware that the pricing environment has been particularly challenging for you over the past two years. Can you kind of give a quick rundown of what's going on with your customer base in the past and what you expect to happen on a go-forward basis? You know, I wasn't here for all the pricing negotiations over the last couple of years of inflationary challenges. What I can tell you is we have gone through, looked at product line profitability in my first 60 days. We have taken actions and been working with our customers on appropriate pricing actions. You saw some of that come through in our last earnings call, where we talked about pricing coming, and you'll see more of it. This is an important piece of how this organization must operate. We're important partners to our customers, but we also have a responsibility to our shareholders to make sure that all of our product lines are generating a return. Pricing actions where there is... inflationary activities or where there is market competitive activities, we must take, whether that's, because of the material inflation or for other reasons. So those are the conversations that we're having internally and with our customers right now. Question from the audience, can you talk a little bit about cash flow this year and next year? Will debt be going up? We expect to be able to pay down debt over the next two years. We think the opportunity to improve our inventory positions to do a better job with regard to our AP, AR balances, and drive performance in our plans that will reduce our inventory levels, should allow us to pay down debt while continuing to invest in the new capital to support our new programs and to drive the growth. I guess this is kind of a lot of balance sheet questions here. Can you address your working capital needs, inventory build? And that inventory build, I guess, goes to the new product introductions. You might as well kind of touch on that- Sure. Also. What takes you have to improve cash flow? What can you do, what levers you have to improve the cash flow? Along the lines of what I just said in answer to your question, we're spending a lot of time looking at our AR, AP balances. And making sure that with our new Chief Procurement Officer, that how we are paying our suppliers is that we're taking advantage of all of our payment terms that we have with our suppliers, and with AR, that we're getting paid by all of our customers. And there's opportunities there that we're seeing things where maybe that we weren't as much in the details as we should be. When I talk about AR, AP balances, there's significant capital to be, shall we say, recovered in that split. With regard to working capital and inventory levels, as we think about the ramp-ups, we certainly need to fill our pipeline with the supplies to support our customers ramp up. In the situation where there are delays, however, we are going back to the customers. We're looking for recoveries on the carrying cost of some of those materials. We're finding alternate ways to do it, to make sure that we have the materials ready, but that we aren't just paying the carrying cost for that. Some key markets have been underperforming this year, notably the e-bike and the commercial truck market, and to some extent, the ag market. Can you talk a little bit about what are your thoughts about those key markets, especially considering their contribution margin to the company and where it stands? Yeah, so what I would say is, on the e-bike side, I don't know as much if they were underperforming or if we had a period where the e-bike segment was grossly overperforming, and it's maybe more toward a normalized level at this point. We have some great technology in the centers that we put into those markets, and we'll continue to work to grow in that space. But I don't see it as a huge, as a huge growth driver for the business, either on the top line or on the bottom line. From the commercial and the ag and business, commercial vehicle and ag business, we know those are cyclical businesses, and they go both with the economy, but they also go with, particularly in North America, with emissions regulations and how pre-truck buys work. We feel optimistic. I've got a long history with the commercial vehicle space, both in Europe and North America, and I feel pretty optimistic about being good partners to our commercial vehicle customers, and look forward to growing more with our Grakon-branded products and where we go there from a lighting perspective, but also the opportunities with power. On the flip side, you, as of last conference call, you said you're starting to see renewed spending in the data center market. And I believe aerospace and defense is starting to tick up. Can you talk a little bit about those two markets, and what's the opportunity profile there? You know, honestly, John, I've had really a fairly limited amount of time to spend in that space thus far. In the first sixty days, I've really tried to get in depth on these critical launches and to see all of our regions. We have seen an uptick on the data center side. I do see more opportunities there. I think, really, us looking at the synergies across our businesses to say, "What other feature functions can we add, and how do we take the synergies across the businesses?" is as much an opportunity as I've been able to explore at this point. Fair enough. How's the CFO and CPO search going, any timeline? The CPO, John Irwin started actually the same day that I started, and he's bringing an immediate impact in working with some outside resources to help us really standardize some of the. You know, in many ways, we acted like a holding company, so you might have four, five, six different SKUs that was buying the same product, and none of those SKUs in the different divisions were paying the same price. So we're seeing those savings, and everybody should remember that purchase material is more than 50% of our cost structure. So having a CPO and having a global strategy from a procurement perspective is a huge leverage opportunity for us, and John's having a great impact already. Laura Kowalczyk starts in nine days, and what I expect from her is for her to bring her experience, both in public companies as well as private companies, PE-based, and really driving numeracy and execution focus more robustly through the organization. I'm really excited to have her join us, and I think her impact will be quite immediate. A question from the audience about your thoughts about the Chinese market and how it is impacting Methode one way or the other. I'm gonna give one answer with the caveat that I'm headed to China on Sunday for the first time to meet our team there and talk specifically about the China market. First, we have a very strong team there, and our business there executes quite well and is also well thought of. It's kind of the lead for our power business. It's both where much of our product development is done and our first launches happen, and based on the percentage of EVs in that marketplace versus the other ones, that's a good thing. I'm looking forward to understanding how we're doing between international OEs and Chinese local OEs. I don't have enough of the detail on that before I get there, but I feel quite good about the capability that we have there and the credibility that we have there with our customers, and... but I think there's a lot more that I need to learn first, John. Fair enough. Well, I do not see any more questions. Jon, any closing statements? I just wanna thank everybody first for your questions and for your interest in the company. As I said to a couple of the people on the one-on-ones, you choose to allocate your investments, and hopefully trust Methode as a leadership team to put your investments to work. I chose with my time to come here, and You know, I stepped away from being a public company CEO 18 months ago and chose to step back in because I thought the opportunity was great here. We're building a team, both with long-tenured people as well as some fresh additions, to help, as I said, write the next chapter of Methode's history and really create value for our customers and for our shareholders, and I look forward to having you be part of it. Okay. Thank you very much. We appreciate you attending the Sidoti conference, and wish you all a great day. Great. Thanks, John. Thanks, John. Thanks, everybody. Bye now.