Good day, and welcome to the Methode Electronics Fourth Quarter Fiscal 2024 Results Conference Call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Robert Cherry, Vice President of Investor Relations. Please go ahead. Thank you, operator. Good morning, and welcome to Methode Electronics Fiscal 2024 Fourth Quarter Earnings Conference Call. For this call, we have prepared a presentation entitled Fiscal 2024 Q4 Financial Results, which can be viewed on the webcast of this call or found at methode.com on the Investors page. This conference call contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Methode undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Methode's expectations on a quarterly basis or otherwise. The forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the SEC, such as our 10-K and 10-Q reports. At this time, I'd like to turn the call over to Mr. Kevin Nystrom, Interim Chief Executive Officer. Thank you, Rob, and good morning to everyone. Thank you for joining us for our Fiscal 2024 Fourth Quarter Earnings Call. I'm joined here today by Ron Tsoumas, our Chief Financial Officer. Both Ron and I will have some opening comments, and then we'll take your questions. Before we discuss the quarter, I want to reiterate the news that we announced in late June regarding our CEO transition. Jon DeGaynor, former CEO of Stoneridge, has been appointed President and CEO of Methode, effective next Monday, July 15. We congratulate Jon and welcome him to the Methode team. Jon has significant industry experience, and I think will be a strong leader for Methode into the future. Back to the quarter. Returning to the quarter, let's go to slide four of the presentation. Our sales for the quarter were $227 million, which were down $24 million year-over-year. The decline was mostly entirely in our auto segment across all three of our reporting regions. The decrease was primarily due to program roll-offs and continued softness in the e-bike market, along with some EV demand weakness. The sales declines were offset by the acquisition of Nordic Lights in the industrial segment around the beginning of the year. After adjusting for goodwill impairment, the lower sales volume, along with continued operational inefficiencies in our North American auto operations, drove the net loss in the quarter. These are essentially the same operational challenges that we've experienced and communicated through this past fiscal year. They are being driven by increased program launches, labor turnover, and higher overall costs. With the company in the midst of record number of program launches, it is only natural for there to be production inefficiencies that drive higher costs, often simply as a matter of a timing lag between the investments to develop and support the launches and the eventual realization of sales from the launches. Customer program delays can also contribute to these fixed cost absorption challenges. We are taking numerous actions to mitigate these launch costs, which range from looking for customer support to reimburse some of these costs and internal cost reductions. We also have our best talent keenly focused on managing the launches to maximize cost efficiencies. Next, I wanna move to orders. We had a strong quarter with over $140 million in annual program awards. These programs were spread across our power, lighting, sensor, and user interface applications. I can also share that the pipeline of potential awards remains healthy. I would note that the profile of the program awards and the pipeline are both heavily weighted towards EV and are subject to reduction or delay due to customer decisions or market conditions. Turning back to EV activity. Their sales in the quarter were 14% of our consolidated total, or for the year, we're at 19%. As previously communicated, we had a sizable EV lighting program roll off in the Q4, and we are now at the beginning of a wave of several new EV power programs. As we transition programs, there is a timing gap where we expect a period of lower EV sales before they rebound. All of this is taking place within the backdrop of a softening near-term market outlook in EV. However, as we look out several years, EV is still clearly a long-term tailwind for Methode, but the path, as we are seeing, may not be linear. At year-end, our net debt was at the lowest level it has been in the last four quarters. That reduction was aided by our highest free cash flow quarter of the year. Our cash position at the end of the Q4 was aided by the sale of certain non-core assets, including the company aircraft. We are maintaining a sharp focus on cash generation. Lastly, we continued our share buyback in the quarter, acquiring $3 million in shares via our automated purchase program. Let's go to page five of the presentation. The awards identified here are some of the key wins in the quarter and represent $141 million in annual sales at full production. The launch timing of most of these programs could be anywhere in the range of one to two years from now. The awards were mainly for power products associated with the EV skateboard architecture. These awards were also weighted towards the United States and Asia. In other areas, we were awarded programs for sensors, user interface, and solutions for applications in e-bikes, traditional auto, and commercial vehicles. It was by far our strongest quarter for the year for awards and was once again driven by EV. As I mentioned earlier, the award pipeline remains healthy but is also very EV-centric. Let's go to page six of the presentation. In summary, for the quarter, sales were under pressure from major auto program roll-offs and market headwinds in the e-bike and EV markets. The goodwill impairment, operational inefficiencies of our auto segment, and lower sales volume drove a net loss. However, we reported the best quarter of the year for free cash flow and new program awards. Lastly, we delivered the lowest quarterly debt level of the fiscal year. Going forward, we are fully focused on profitability improvement. We are undertaking initiatives to reduce costs, particularly in the areas of sourcing, logistics, and sales and administrative costs. We're also focused on monetizing non-critical assets, managing our strong backlog of program launches, and improving low-margin programs. We will also continue our efforts to reduce working capital, increase cash flow, and reduce net debt. These actions are all foundational to our long-term plans and will carry on beyond the company's leadership transition. Simply put, our fiscal 2025 will be a year of repositioning the business with the goal of returning the company to growth and profitability in 2026. Now, before I turn the call over to Ron, who will provide more detail on Q4 financial results, I would like to recognize Ron for his service to Methode. Ron's retiring tomorrow, and this is his last earnings call. Ron has been a valuable contributor to Methode for over 40 years and will long be remembered as a pillar in the history of this company. We thank Ron for his tireless efforts and wish him and his family the best in retirement. With that, Ron, I'll hand it over to you. Thank you, Kevin, and good morning, everyone. Please turn to slide eight. Q4 net sales were $277.3 million, compared to $301.2 million in fiscal 2023, a decrease of 8%. This quarter's net sales included $21.8 million from the Nordic Lights acquisition and $1.1 million of unfavorable foreign currency translation. Excluding Nordic Lights and foreign currency, sales decreased by 15%. The quarter saw the continuation of two key automotive program roll-offs, one in North America and one in Asia. The one in Asia fully rolled off in the Q4. We also had persistent softness in the e-bike market and some weakness in EV demand. The e-bike market continues to be overstocked. Q4 loss from operations was $61.5 million, down from $8.5 million of income in fiscal 2023. Income was down to the goodwill impairment, the ongoing operational inefficiencies, which were mainly in our North American automotive business, which drove higher inventory, labor expense, other increased production costs, combined with lower sales volume. Similar to our Q2 of the past fiscal year, at the end of the Q4, we experienced a goodwill impairment triggering event when our market cap was less than our book value. Based on this, we performed a quantitative analysis on our reporting units with goodwill, and we determined that at our North American Auto reporting unit, the current value of the reporting unit was less than the carrying value, resulting in a goodwill impairment of $49.4 million. There is no remaining goodwill at this reporting unit. Adjusting for the goodwill impairment of $49.4 million and restructuring costs of $2.3 million, which were partially driven by headcount reductions, our non-GAAP adjusted loss from operations was $9.8 million. Please turn to slide nine. Q4 diluted earnings per share decreased to -$1.63 from a positive $0.22 in the same period last fiscal year. The EPS was negatively impacted by lower operating income, the goodwill impairment, and higher net interest expense. A larger tax benefit compared to the prior year was a partial offset. Adjusting for the goodwill impairment of $1.40 per share, restructuring costs of $0.05 per share, and a gain on sale of assets of $0.05 per share, our non-GAAP adjusted diluted EPS decreased to -$0.23 per share. The gain on the sale of assets was mainly driven by the sale of the company aircraft. Shifting to EBITDA, a non-GAAP financial measure, Q4 EBITDA was -$44 million, versus $21.9 million in the same period last fiscal year. EBITDA was negatively impacted by the lower gross profit, lower sales, partially offset by lower selling expenses. Selling administrative expense was $8.5 million lower, primarily due to the acquisition costs of Nordic Lights in the prior year, which accounted for $6.8 million of the decrease. Adjusting for the goodwill impairment of $49.4 million, restructuring costs of $2.3 million, and the gain on sale of assets of $2.4 million, our adjusted EBITDA decreased $26.4 million to $5.3 million. Please turn to slide 10. Debt was up $24.1 million from the prior year-end, but it was down slightly from the Q3. The debt increase was mainly due to working capital investments and higher CapEx, both to support sales and new program launches. We ended the quarter with $161.5 million in cash, up $4.5 million from the end of last fiscal year, and up $38.6 million from the Q3. The sale of the company aircraft was a notable driver of the sequential increase. Net debt, a non-GAAP financial measure, increased by $19.6 million from the prior year-end to $169.4 million, but was down $39 million from the Q3 and was at its lowest level since the end of fiscal 2023. We were in compliance with all of our debt covenants at the end of the Q4. However, at the end of the quarter, we proactively entered into an amendment with our credit facility agreement with our lenders. The amendment lowered the size of the credit facility from $750 million to $500 million, raised certain covenant ratios, and added additional terms. This amendment gives us further confidence that we will remain compliant with our debt covenants over the next 12 months. For further information, please see our 10-K filing. Please turn to slide 11. Q4 's net cash from operating activities was $24.9 million, as compared to $49 million in fiscal 2023. The decrease of $24.1 million was primarily due to lower net income in the quarter. Q4 c apital expenditure was $9.1 million, as compared to $11.2 million in fiscal 2023, a decrease of $2.1 million. Q4 free cash flow, another non-GAAP financial measure, was $15.8 million, as compared to $37.8 million in fiscal 2023, a decrease of $22 million. This decrease, again, was primarily due to reduced net income. After having negative free cash flow the first two quarters of the year, we returned to positive free cash flow in the third and fourth quarters. Please turn to slide 12. Moving to the full year results, fiscal 2024 net sales were $1,114.5 million, a decrease of 6% from fiscal 2023. Excluding Nordic Lights and foreign currency, sales decreased by 13%. This year was impacted by the roll-off of two key automotive programs and the overall automotive segment weakness in all three regions. Fiscal 2024 diluted earnings per share decreased to a negative $3.48, from a positive $2.10 in fiscal 2023. The EPS was negatively impacted by the goodwill impairments, operational inefficiencies, higher interest expense, and lower sales volume. Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustment, and gain on net sale of assets, our non-GAAP adjusted diluted EPS decreased to a negative $0.43. Please turn to slide 13. Shifting to EBITDA, a non-GAAP financial measure, fiscal 2024 EBITDA was a negative $53.5 million, versus a positive $142.3 million in fiscal 2023. EBITDA was negatively impacted by lower gross profit, lower sales, and higher SG&A expenses. Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustments, and gain on net sale of assets, our Adjusted EBITDA decreased 64% to $55.3 million. Please turn to slide 14. Fiscal 2024 net cash from operating activities was $47.5 million, as compared to $132.8 million in fiscal 2023. The decrease of $85.3 million was primarily due to lower net income. Fiscal year 2024 CapEx was $50.2 million, as compared to $42 million in fiscal 2023, an increase of $8.2 million. The increase was driven by investments required to support new program launches. Fiscal 2024 free cash flow, a non-GAAP financial measure, was a negative $2.7 million as compared to a positive $90.8 million in fiscal 2023, a decrease of $93.5 million. This decrease was primarily due to reduced net income. After having negative free cash flow in the first half of the year, we returned to positive cash flow in the second half. Please turn to slide 15. Regarding forward-looking guidance, it is based on management's best estimates and is subject to change due to a variety of factors, as noted at the bottom of the slide. For fiscal 2025, we expect net sales to be similar to fiscal 2024, and adjusted pre-tax income to be approaching breakeven. The adjusted pre-tax income for the second half of fiscal 2025 is expected to be significantly stronger than the first half, with the Q1 of fiscal 2025 being similarly negative to the Q4 of fiscal 2024. The fiscal year 2025 guidance assumes depreciation and amortization of $60 million-$65 million. Looking further ahead to fiscal 2025, we expect net sales to be greater than fiscal 2025 and pre-tax income to be positive and notably greater than fiscal 2025. That concludes my comments, and we can open it up for questions. Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset as if listening on a speakerphone to provide the optimal sound quality. Please hold just a moment while we pull for questions. Your first question is coming from Luke Junk with Baird. Please pose your question. Your line is live. Good morning. Thanks for taking the questions. First, maybe just a point of clarification on the fiscal 2025 expectation for pre-tax income to be approaching breakeven. Should we be thinking about that for fiscal 2025 in aggregate? And just basically trying to square the full year review versus the Q1 coming out of the gates, kind of similar to where you were in the Q4. Thank you. Yeah. So, Luke, we do expect to approach breakeven for the year, but the Q1 will be much like this, as we experienced in the Q4 of fiscal 2024, with gradual improvement and then stronger in the second half, especially in the Q4, where we have launches that are expected to be in full launch at that time. Got it. Okay, that's helpful. Thank you. And then, yeah, just relative to the flat outlook for sales, roughly in fiscal 2025, you know, that would imply that you're gonna be able to get over the top of the remaining product sunsets with launches, like you said, those launches especially stepping up in the Q4. Can you just talk about guardrails that you have in place internally from an operational standpoint, to make sure that those launches go smoothly from Methode's end, and then just what you're hearing from customers in terms of timing, volumes, risk to take rates, or just risk of any pushouts in that view? So, Luke, why don't we start with the roll-offs first? We had, you know, approximately our two major programs that we described, approximately $90 million rolled off in fiscal 2024, and we expect the final roll-offs of those programs in the $100 million range for fiscal 2025. So, those all these new launches will basically fill the pipeline or the void. And it's important to know that these two largest programs that we have will be pretty much fully rolled off at the end of 2025, providing, you know, a nice path into fiscal 2026 as we get in there. So, in terms of, you know, the operational perspective, you're right, we're seeing some slowdown, in particular in EV demand, but we're working with our customers to make sure that we can maximize our pricing adjustments to account for those lower-end customer volumes. The other thing I want to add is we're initiating several cost reduction programs, in particular with the sourcing costs and logistics costs. We're doing our legwork now, but those things take time, and we probably won't see real meaningful benefits until the second half of the year. Got it. If I could ask on, just balance sheet-related items, or I guess more cash flow, really, just any high-level expectations you can share for cash flow in the coming year? And then CapEx, we saw that come down, you know, quite a bit sequentially in the Q4. Just guard rails for CapEx in the coming year as well. Yeah, I think we will see fiscal 2025 CapEx to be in the same range or higher than in fiscal 2024. As we continue to all these awards that we won, we expect to continue to have significant CapEx in fiscal 2025. Thereafter is a little bit different. In terms of, you know, the cash flow, as we, you know, as we approach breakeven relative to fiscal 2024, we'll get some net income would be, or reduced loss would be better. And then from the, we have a lot of working capital initiatives that we started on and saw some progress in fiscal 2024, that we expect to carry on into fiscal 2025. And we have additional items such as, we talked about, we had some success in non-core asset sales in the Q4 of fiscal 2024. We will continue to look at those opportunities as well. So the sum of all of those items, you know, should impact the cash flow in fiscal 2025. And then just lastly, if I can ask on cap allocation and near-term priorities beyond, you know, the CapEx, obviously, that's required for the business. Thinking, you know, especially just prioritization of debt paydown relative to share repurchase, which I guess, maybe was a little surprising that there was some repurchase in the quarter, and then just maintaining the dividend on a go-forward basis as well. Well, the share repurchase was part of a preexisting program, and I think we've pretty run up almost the entirety of that program. With regard to the dividend, that's a decision the board makes quarter by quarter, so it's hard for us to predict quarterly dividend payments going forward. Yeah, I mean, and Luke, the number one priority, as Kevin mentioned, we had a 10b5-1 type of an arrangement, but we'll be on the balance sheet, deleveraging and things of that nature and protecting the balance sheet. That will be far more than share repurchases or anything along those lines. Got it. Okay. Thank you. I'll leave it there for now. Your next question is coming from Saree Boroditsky with Jefferies. Please pose your question. Your line is live. Good morning, thanks for taking my questions. So I really appreciate the two-year guidance. I just want to understand, as we think about returning to growth in 2026, you know, what's the underlying assumption for EV adoption, and how will that be impacted if we do see a slower curve than expected? So there is definitely 2026. A lot of the projected growth is in the EV space. There is certainly some sensitization that is definitely going on in the projections and what the outlooks are going to be. But having said that, we still expect the growth that we outlined. Understood. You know, obviously, you talked about the guidance, implying a step up in the second half of fiscal 2025. Could you just talk about the key drivers underlying this increase, and then how much is market related versus what's in your control? A lot of that is, as we talked about, some of the new programs being launched, and we're by the end of the year starting to see some growth from those new programs. Your question of it, is it under our control? Yes, and we're doing our best to make sure those launches go efficiently. And as Ron implied, we are putting some haircuts or adjustments into our projections for the currently soft EV market into those numbers. Yeah, the only thing I'll add to the cadence of the fiscal 2025 by quarter is that, you know, a lot of it's sales-driven and launch-driven, but also, the cost reductions that are going on, they take, some of them take time when we think about procurement and other opportunities for us. They may not... Well, we've initiated those, but sometimes it'll go into the third and fourth quarters. It takes time. So the cost savings cadence also is weighted more towards the third and fourth quarter as opposed to the first and second quarters. Appreciate that commentary. That's, that's sort of what I was getting at. You know, obviously, the focus is on improving profitability. Maybe just building on that for my last question, you know, what is that opportunity, as you can size that cost savings opportunity as you go into fiscal 2026, maybe sourcing, logistics, and this from a sales and administrative perspective? You know, we're really just starting these programs, so it's a little bit dangerous to put ranges around it. We do think it will be significant, and we do think that its impact will be more towards the second half of the year. Appreciate the questions. Thank you, guys. Once again, if you do have any remaining questions or comments, please press star one on your phone at this time. Please hold a moment while we pull for any additional questions. Your next question is coming from Gary Prestopino with Barrington Research. Please pose your question. Your line is live. Yeah, good morning, all. Several questions here. First of all, Kevin, in what you're talking about with, you know, getting your costs under control and, and trying to fix the problems that are coming out of North American Auto, I mean, are, are you-- I would assume that you are working in conjunction with Jon DeGaynor at this point, in terms of at least some of these initial thrusts at what you're trying to do to rectify some of the problems that you're having. Is that a correct assumption? More than correct. I'm working shoulder to shoulder with John on these initiatives. Okay. All right. So maybe for all of us, 'cause I still have a hard time understanding this. You're having the problems in Mexico, correct? That's where your problems are with North America. And you have rolled out programs before in the past. What has changed so much that you're getting a lot of these operational efficiencies in Mexico at this point? You know, that is causing the decline in the operating income generated by the automotive segment? I think I can say that we've made significant improvements in the discipline around launches in Mexico. And some of the launches that are in process right now, that are just beginning to deliver products, they've gone much better than launches in the past. So I think it's just, you know, experiencing what we experienced in early this past year and learning from our experience and improving our launch process. And the only thing I'll add to that, Gary—the only thing I can add to that, Gary, is we are also, at the same time, experiencing the roll-off of our largest program, which we have been running for, in various iterations for over a decade, and we're really, you know, really good at it and really efficient and all of that. And replacing that, as we've demonstrated with all these booking awards, with launches that... a lot more launches that are significant, but nowhere near the value of that. So when you combine that with the expansion of capacity and getting ready for these launches and all of those things going in at one time, it is a fertile ground for experiencing, temporarily, some of the things that we're experiencing. Okay. I was just going through some of the past slides, but in aggregate, do you have what the business awards were in fiscal 2024 in total, and what- how much of that dealt with electric vehicles? I believe in the last four years, we have been in the $800 million, $750 range, and most of it is in the electric vehicle. A lot of those products are in the electric vehicle. For fiscal 2024, it's in the $200 million-$250 million range for bookings, which the bulk of that is in the EV space. Okay. And in what you're doing with EVs, are you doing any programs for European manufacturers at this point that are for manufacturers that are producing in Europe and selling in Europe? Yes, to answer... Absolutely. And that's one thing we really like, is we've spread our seed amongst a lot of the OEMs on three continents. So we're getting diversification from customers and programs, which is really good. And we're in a good position with a lot of it. And we've done some with the startups and that as well. So, from a portfolio diversification and geographic diversification, we're sitting in a good spot with our EV opportunities. What about the Chinese manufacturers? We do not as much. We're certainly we do more in Europe, and now with these launches in North America. We have a presence in China, but it is not as significant on a go-forward basis, and it's a challenging market, for sure. Okay. And then just last question. I'm just looking at some historical numbers here. I mean, your adjusted EBITDA margin was in the high teens in 2019. 2020, started to see a drop in 2021, 2022. I mean, given the composition of the company now, do you think that once all of these issues are rectified, that this becomes a mid- to high-teens EBITDA margin, adjusted EBITDA margin business? Or is there something that has structurally changed here that is causing the adjusted EBITDA margin to step down from where you were four or five years ago? I think. So, let me start with this. Four or five years ago, the business has definitely changed, especially the automotive side, with- ... the program rolloffs and a couple things else have impacted our EBITDA margins over the last couple of years, especially the last two years. Right. First of all, is the slope in the e-bike market that is, that makes the elastic torque sensing technology that we have, and arguably the best in the world at, is one of our most highly differentiated products, and that business has basically been cut in half. So that clearly has a margin drag on the business. The roll-off of these programs and then all of the upfront cost and capital that we're expending for 2026 and 2027 and 2028 deliveries- ... has also negatively impacted our EBITDA margins. So it's gonna be a journey as we go, as we go through this, to stair-step our margins back to, you know, where they might have been, a couple of years ago. But it's a journey. It is absolutely gonna be a journey. And, until we get to full launch on a lot of these programs that we've funded upfront, it will take a little bit of time. Okay. And then, you know, I realize you guys have had a lot on your plate over the last couple of months here. And Ron, congratulations on retiring. Hope you enjoy yourself. Where are you? I know you just filled the CEO search, but where are you on the CFO search side, and what are some of the qualities you're looking for in a new CFO? We're interviewing candidates. It's still probably some time before we find the right fit. We're looking for somebody that has experience in this kind of change or this transition. We're gonna be going through a lot of cost reductions, a lot of efficiencies, looking at our portfolio, making sure we're getting the most of all of the regions around the world that we operate in. So it's gonna require a special skill set, and we're taking our time to make sure we find the right person. Okay. Thank you very much. Appreciate it. There appear to be no further questions in queue at this time. I would now like to turn the floor back over to Kevin Nystrom for any closing remarks. Thank you. I wanna thank everybody for your participation in the call, all of your questions, and most of all, appreciate your support of Methode Electronics. Thank you, and have a good day. Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.