Good morning, and welcome to the NN, Inc. 1st quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jeff Tryka, Investor Relations with NN. Please go ahead. Thank you, Anthony. Good morning, everyone, and thanks for joining us. I'm Jeff Tryka, Investor Relations contact for NN, Inc. I'd like to thank you for attending today's business update. Yesterday afternoon, we issued a press release announcing our financial results for the first quarter ended March 31st, 2023, as well as the supplemental presentation, which have been posted on the investor relations section of our website. If anyone needs a copy of the press release or of the supplemental presentation, you may please contact Lambert & Co. at area code 315-529-2348. Our presenters on the call this morning will be Mike Felcher, Senior Vice President and Chief Financial Officer, Andrew Wall, Senior Vice President and Chief Commercial Officer, and Douglas Campos, Interim Chief Operating Officer of Mobile Solutions. Before we begin, I'd like to ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release and supplemental presentation and in the Risk Factors section of the company's annual report on Form 10-K for the fiscal year ended December 31, 2022, and when filed, the company's quarterly report on Form 10-Q for the three months ended March 31, 2023. The same language applies to comments made on today's conference call, including the Q&A session, as well as the live webcast. Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, including semiconductor chips, foreign exchange rates, cash flow, tax rates, acquisitions, synergies, cash and cost savings, future operating results, performance of our worldwide markets, the impacts of the coronavirus pandemic, and the Russian-Ukrainian conflict on the company's financial condition and other topics. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control. The presentation also includes certain non-GAAP measures as defined by SEC rules. A reconciliation of such non-GAAP measures is contained in the tables in the financial section of the press release and the supplemental presentation. Reviewing the agenda for today's call, Mike will open with an overview of the first quarter and an update of actions taken, the company has taken to position NN for success. Andrew will then provide a market update and discussion of new business opportunities. Mike will then provide a detailed update to the financial results for the first quarter. Douglas will provide an update on each of our business segments before turning the call back over to Mike, who will conclude with a discussion of our outlook for the remainder of 2023. There will be a Q&A session following the conclusion of the prepared remarks. At this time, I will turn the call over to Mike Felcher, Senior Vice President and CFO. Thanks, Jeff. Good morning, everyone, and thank you for joining. Let me start by noting that Warren is unable to join the call today due to a health situation with his family. The first quarter of 2023 presented a number of challenges to our business, including the ongoing slowdown in residential and commercial construction that impacted our Power Solutions business. Our team continues to be resilient and focused on effectively managing the areas within our control to minimize the adverse effects of the current macroeconomic environment. If you turn to page four of the presentation, we have summarized some of the results from our first quarter. Sales for the quarter were $127.1 million, down 0.8% from the first quarter of 2022. Power Solutions sales were down 5.7%, driven by lower electric component volume and customer inventory reductions, partially offset by pricing. Mobile Solutions sales were up 2.6% from prior year, driven by pricing actions taken throughout 2022, partially offset by lower volume. We had a strong start to the year on new business wins, with a 75% increase from the prior year and with 76% in our strategic segments. Net price inflation was a benefit of $2 million in the first quarter on a year-over-year basis, primarily driven by premium pricing achieved at our Irvine facility for us agreeing to extend production to meet customer requirements before we close the facility. As previously communicated, we implemented 5%+ price increases for Power Solutions customers that are not on long-term contracts during the first quarter, which will most significantly benefit subsequent quarters. First quarter results were also impacted by unfavorable overhead absorption and lower income from our China joint venture as a result of lower volume due to the end of COVID-19 restrictions and the Chinese New Year. Combined, these factors contributed to loss from operations for the first quarter of $7.1 million and a non-GAAP adjusted loss from operations of $0.4 million. non-GAAP adjusted EBITDA was $8.1 million or 6.4% of sales for the first quarter of 2023. We continue to maintain strong liquidity at $43 million. Our free cash flow in the first quarter was a use of $3.7 million, which was a considerable improvement over the free cash outflow from the prior year first quarter. During the first quarter, we terminated our $60 million interest rate swap, resulting in proceeds of $2.5 million, which further enhanced our liquidity. The improvement was a result of continued efforts to effectively manage working capital despite the more challenging operating environment. If you turn to page five of the presentation, I will provide an update on several key initiatives. Let me start with an update on the operational improvements we are implementing at two facilities experiencing inefficiencies, which we noted on the fourth-quarter call. The Wellington operational improvements are proceeding according to plan, but Juarez has been slower than expected. Improving the operating results at Juarez is the number one focus area for our leadership team. From an operations perspective, Gunars Vinkels and Douglas Campos have transitioned into leadership of the Power Solutions and Mobile Solutions teams respectively. You will hear from Douglas a little later as he highlights the performance of each operating segment during the first quarter. We have worked to optimize our operating footprint with the closure of five facilities as previously announced, all of which we expect to be closed by the end of the second quarter of 2023. We have secured sublease agreements for the Taunton and Irvine facilities, which will offset our lease obligations over the remaining term. These closures are expected to generate approximately $11 million improvements in adjusted EBITDA versus our 2022 results. Beyond facility closures, we continue to review overall operating costs. During the second quarter, we reduced indirect labor by 10%, which we estimate will result in approximately $7 million in annualized cost savings with a benefit of over $4 million in 2023. During 2022 and 2023, we were able to increase pricing to address inflationary costs, achieving approximately $13 million of year-over-year pricing. The company anticipates making an announcement regarding the CEO transition in the very near future. Now I will turn the call over to Andrew, who will provide an update on our markets and key growth initiatives. Thanks, Mike, and good morning, everyone. I'm happy to be joining you on today's call to review our go-to-market strategy, new business wins, and updates on current market conditions. If you turn to page seven, I will review some of the new business wins in the first quarter of 2023. We secured new business wins with total estimated sales of nearly $37 million through 2026, which was up 75% compared to the first quarter last year. Peak annual sales for these wins totaled $13.5 million, up 82% compared to the prior year. I'd emphasize that these new business wins are the results of our revitalized team focusing on new business opportunities in attractive market applications where NN's unique value proposition resonates most with potential customers. With a refined approach, we have improved the margins associated with these new business wins by approximately 12 percentage points compared to the prior year. On the right side of this page, you can see the breakdown of annual sales volumes of new business wins by market segment over the next three years. We have taken a focused, selective, and disciplined approach to new business, resulting in significant portion of our new business in the EV and universal auto segments, which is aligned with our strategy. As we look ahead, we are well positioned for strong growth in the power and electrical space with multiple pursuits we expect will be awarded over the next two quarters. I would note the efficiency of our sales efforts with a low $2.7 million CapEx investment to support these sales. If you turn to page eight of the presentation, we will review an exciting win our team achieved with a global market leader in electric vehicles. This customer is a key player that is expected to produce more than three million EVs this year. Not only does this particular win represent $3.5 million in sales at program peak, we consider this a major breakthrough new business win, as it's a new relationship with a global player that presents significant opportunity for additional programs in the future. NN's value contribution to this relationship reflects the heart of what we bring to every customer relationship. Yes, our expertise and experience in electric power steering solutions was a key to winning this initial business, but our responsiveness and speed, including the ability to start up production less than three months after the award, will be critical to growing the relationship over time. This new relationship also highlights a win that checks all of the boxes of what we look for. This represents growth in a strategic market, in this case, electric vehicles. It also highlights high potential volume production with a market leader that has a significant growth potential. This new relationship also leveraged existing assets to generate near-term financial results and significant growth potential over time. Turning to page nine, I will provide additional detail on some key commercial actions our team has implemented to drive growth. To start, we recognize that to effectively drive new business wins, we have to effectively motivate our sales force. We modernized our compensation programs to incentivize and motivate new business growth. We have shifted more compensation to variable components to enable higher total earnings opportunity based on bringing in new business. This eat-what-you-kill approach directly ties the work of our sales team members to their performance, increasing payouts for high performers. We also closely tied these incentives to our strategic priorities, emphasizing a 60% target for electrical and EV/hybrid new business wins. We are also expanding our sales team by 20%. With more feet on the street chartered with undiluted focused on selling, we will be better positioned to proactively engage customers, understand problems and needs, and close business for NN. We are focused on attracting new sales talent with specific experience and relationships in the electric power and EV hybrid vehicle markets, improving the depth of our team to drive results. We are working to enhance market awareness of NN's capabilities, differentiation, and value proposition, as well as the differentiated approach of leveraging our multiple process technologies. We are accomplishing this goal by expanding and deepening our participation in the industry associations, forums, and trade shows to connect our business development people with key decision-makers in our target markets. We have and will continue to increase the volume of press releases, social media posts, and target advertising to enhance awareness of NN. Reaching, and most importantly, creating value-added connections with existing and prospective customers in our target markets is vital to our growth journey. We have positioned these sales and business development team to win through tools and training that enable them to drive new business growth. These efforts include a lot of the basics, such as a refreshed website, varieties of pitch decks and white papers, and most importantly, effective training for cross-selling opportunities. If you turn to page 10, we have outlined an example of our successful efforts to drive growth by solving problems in the electrical space. One of our customers in the renewable energy space was faced with a compressed timeline for the integration and installation of a large solar project. Without in-house resources to develop a durable stamped electrical grounding assembly that safely met safety and durability requirements, this customer turned to NN. We were able to bring them the engineering expertise to help finalize the design optimized for manufacturability. We brought to bear our global manufacturing footprint to support solar projects in multiple countries at scale, and we did this with speed that allowed the customer to meet their compressed timeline to completion. This win provided NN with multiple growth opportunities. We start with additional potential orders from this customer for future solar projects leveraging our strengths. Perhaps more importantly, this provides us with a foothold in the renewable power industry that can be leveraged with solar developers across the market. On page 11, we highlight the targeted approach to new business with nearly 80% of our $546 million new business pipeline focused on the electrical, EV/hybrid, and universal auto segments in alignment with our long-term strategy. Looking at the pipeline, we do have a reduction in the total active proposals under pursuit. This decrease was the result of several factors, some of which are the result of our strategic actions. We eliminated pursuits that do not align with our strategic growth objectives, as well as projects that are capital-intensive or providing unattractive cash flow. We also reviewed projects within the pipeline to eliminate potential duplicative proposals with different customers for the same program, providing for more consistent data. The pipeline was also impacted by the closures of Taunton and Irvine facilities. Overall, we feel good about the size of our pipeline, particularly given the greater strategic focus of those opportunities we are going after. On slide 12, we've highlighted key macro trends in the residential and commercial construction markets. As widely reported, current macroeconomic conditions and increasing interest rates have presented a drag on construction activity. Despite the near-term demand softness in the residential and commercial electrical components, as well as inventory reductions by certain customers, the mid to long-range outlook remains robust. Industry forecasts project a long recovery and growth in the residential construction as demographics and new home formations drive demand for housing. Turning to slide 13, you will find that excuse me. You will find that we have provided a macro automotive market update. In their March executive update, LMC has forecasted global light vehicle production to increase approximately 5% with a positive production outlook in all key regions. While LMC notes a deep recession in 2023 is not expected, the effects of higher interest rates and lingering inflation will likely result in a drag on global growth in the second half of the year. Long term, we see the continued rapid expansion of hybrid and EV adoption in the industry through the end of the decade, eventually comprising a majority of global production. This high growth market is our target and where our entire team is focused on positioning NN to win. I will now turn the call over to Mike, who will provide an update on the first quarter financial results. Mike? Thank you, Andrew. If you turn to page 15, I will review some of the financial highlights for the first quarter. Compared to the prior year, sales decreased 0.8% to $127.1 million, driven primarily by lower volumes and foreign exchange headwinds, partially offset by pricing actions. From a profitability standpoint, net price inflation was approximately $2 million favorable year-over-year. This benefit was offset by unfavorable impacts of approximately $5 million due to lower volume, a reduction of China joint venture income of $1.8 million, driven by lower volume associated with eliminating COVID-19 restrictions in the Chinese New Year, and unfavorable overhead absorption of $1 million. Turning to slide 16, working capital turns improved in the first quarter to 4.5 turns from 4.3 in the previous quarter. We saw our working capital increase by $2.9 million compared to the fourth quarter as a result of normal seasonality, but decreased by $9.9 million from the first quarter of 2022 as we more effectively managed inventory receivables and payables in the current environment. Turning to slide 17, we have slightly increased CapEx for the first quarter to $5 million from $4.3 million in 2022. As we continue to maintain focus on cash, we will maintain our stance of taking a disciplined approach to CapEx and allocate capital expenditures to higher growth in key end markets that we have previously identified as part of our long-term growth strategy. Please turn to slide 18. This slide illustrates our free cash flow for the quarter. Free cash flow was a use of $3.7 million in the first quarter of 2023. Our results in the first quarter were positively impacted by $2.5 million from the terminated interest rate swap, along with a $1.8 million benefit from equipment sales, including advanced payments on some of those sales. The outflow of $3.7 million in the first quarter is compared with an outflow of $9.4 million in the first quarter of 2022, an improvement of $5.7 million. We incurred approximately $2.6 million in cash costs for severance, settlement, and facility closures during the quarter. Turning to slide 19, net debt at the end of the first quarter was $147.7 million versus $146.3 million in the fourth quarter of 2022, an increase of $1.4 million. Our net debt to adjusted EBITDA ratio stood at 3.82x at the end of the first quarter, compared to 3.33x at the end of the fourth quarter. We had $43 million of global liquidity, including cash and availability on our revolver as of March 31st, 2023. Our ABL was drawn by $1 million, and our domestic liquidity was $33 million. We are still evaluating a potential preferred equity raise. The decision will be based on our ability to execute the raise by June 30th, which would secure a reduction in our term loan PIK interest and warrant cost of approximately $3 million through Q2 of 2025. We would target a $10 million preferred equity raise, which would improve domestic liquidity and reduce the domestic liquidity covenant from $20 million to $15 million. I would like to emphasize that we are not required to complete an equity raise, and we would only do so if we conclude the net cost on the incremental capital and liquidity is attractive. With that, I would like to turn it over to Douglas to cover our first quarter segment highlights. Thank you, Mike, and good morning, everyone. We have presented additional information for each of our group, starting with Power Solutions on page 21. Power Solutions sales decreased 5.7% year-over-year, primarily driven by decreased electrical and general industrial component sales due to lower housing starts. As you can see on the graph, they were down almost 19% year-over-year for the first quarter, along with customer inventory reductions. We recognized favorable movements stemming from premium pricing in connection with the closure of our Irvine, California facility, which helped improve sales and profit in the first quarter. Profitability increased compared to the prior year period, driven by favorable impacts from the Irvine premium pricing and rationalizing unprofitable business with the Taunton facility, partially offset by lower volumes. Looking forward, the closures of our Taunton and Irvine facilities continue to proceed on schedule, and we expect them to be completed in the second quarter. We expect that new business wins and market dynamics will continue to drive growth through the remainder of 2023. On page 22, sales in our Mobile Solutions Group increased 2.6% versus the prior year period. The increase was primarily driven by increased pricing, partially offset by reduced volumes through the quarter, as well as foreign exchange headwinds due to the stronger dollar. Profitability decreased in Mobile Solutions compared to the first quarter of 2022, driven by performance challenges in our Wellington Juarez facilities. We are addressing performance issues at each of these facilities, as Mike previously mentioned. We are seeing good progress in our Wellington facility operations, but the Juarez facility is a bit more challenging and will require additional time. Profitability at Juarez is further complicated by the strengthening of the peso relative to the US dollar, as our sales are primarily in dollars, but labor expenses are generally paid in pesos. Profitability was also adversely impacted by volume reductions through the quarter, including the impact of the China joint venture income due to the Chinese New Year, also known as the Spring Festival, when business was shut down. Due to the relaxation of the COVID-19 restrictions in China, this year, the festival involved longer business closures than experienced since the start of the pandemic. Looking ahead, we continue to see positive trends in customer demand and expect stronger sales in the second quarter as compared to the first quarter. We should start to recognize some of the incremental cost savings and efficiencies associated with the three facility closures in the second quarter of this year and the right sizing of indirect labor in our operations. With that, I now turn it back over to Mike. Mike? Thank you, Douglas. Turning to page 23, we are updating our outlook for 2023, which reflects lower expected volume across end markets driven by market conditions, as well as customers resetting inventory levels and taking a more cautious approach to ordering patterns. As a result of these drivers, we are updating our outlook as follows: Net sales in the range of $550 million-$545 million, a reduction of $10 million from our previous range. Adjusted EBITDA in the range of $47 million-$57 million, a reduction of $3 million from our previous range. Free cash flow in the range of $7 million-$17 million, a reduction of $3 million from our previous range. Our adjusted EBITDA and free cash flow outlook reflects the conversion impact of our lower sales volume expectation, as well as slower than expected improvement in the Juarez operation. We implemented a 10% reduction in indirect labor, which will begin to show results in the second quarter. Our free cash flow guidance includes an estimated $7 million in cash outlays for severance settlement and facility closure costs, but does not include the CARES Act tax refund of approximately $11 million due to uncertain timing. I would like to conclude my remarks noting that our team continued to make solid progress to position our company for long-term success by focusing on top line growth and expansion of our new business pipeline. These efforts are enhanced as we maintain cost discipline in every area of our operations while looking for new opportunities to drive efficiency. We are focused on effectively managing working capital and capital expenditures to drive improved free cash flow. I will now turn the call back to the operator for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Rob Brown with Lake Street Capital Markets. You may now go ahead. Good morning. [Hello?] Morning, Rob. On the revised outlook, I guess could you give us some color? Is it mostly in the Power Solutions market or is it sort of evenly split, between Power Solutions and Mobile in terms of the lower outlook? Yeah, I think the volume softness we saw, particularly in the first quarter was a little bit more weighted towards Power. I think in terms of the operational challenges, obviously Juarez is within the Mobile Solutions segment. As we saw a slower than expected recovery for the Juarez profitability as well as some of the volume impacts for the year, we obviously took a pretty significant action in the Q2 with a 10% indirect labor reduction that will benefit both groups pretty evenly, starting in Q2 with full realized savings in Q3 and Q4. Okay. Then on the Power Solutions business, how much visibility do you have there? I know you give some overall market statistics, but, you know, at this point, what's the visibility for the rest of the year and sort of confidence level in kind of the current outlook? I'll take that one. This is Andrew. Hey, Rob. You know, looking at the Power Solutions business, you know, we have been studying it very carefully, the recent trends and some that have been, you know, a little bit further back, and assessing that. We're talking to customers regularly about their outlooks and getting their feelings. We've baked all of that obviously into our year-end outlook. I think, you know, what's gonna go on with interest rates going forward will certainly, you know, play a role in how the year pans out. You know, if we think about our view, I think it's gonna be a tough year, but at the same time, you know, we've got a line of sight to still, you know, achieve what we're estimating to have for Power Solutions. We're watching it carefully, getting a lot of feedback and just making sure that we're removing all roadblocks to keep the volumes going through the business and working with customers. One thing that has impacted us that's gonna be an improvement, I would say, is that, you know, as the supply chain has healed or gotten a lot better, I'll say, over the last several quarters, you know, a number of customers have reduced their inventory levels, and we're starting to see that wean off where they're starting to think about reordering again at the, at the older rates. That'll probably help in terms of completing the year as well. Great. Thank you. That's very helpful color. My last question's on kind of the new bit business win with the EV manufacturer. I guess, I think you implied one product there. What's the sort of product and what's the opportunity? Are there, you know, several other products that could become products you supply them at that point or what? Yeah, absolutely. Yeah, I'm glad you asked about it. So the, the component is part of their electric power system for their electric power driving system. It's a breakthrough, it's an awesome win for us. Electric power steering, sorry, I had a brain freeze for a moment. What that already has represented is now that they've seen what we can do, what our capabilities are, how we do things, how we're ramping up the business, we're already seeing a number of other opportunities from that same customer, right? We're in that early stage, proving ourselves out, but, based on the size of where this particular customer is, we anticipate this opening, some really good market for us and they're a true leader in the space. Okay, great. Thank you. I'll turn it over. Again, if you have a question, please press star then one. Our next question will come from Tom Kerr with Zacks Investment Research. You may now go ahead. Good morning, guys. A couple of quick ones. I think most of my questions have been answered. Can you talk about the timing of the China kinda slowdown? I thought you said in the last earnings call it was, I think the word was snapping back in January. Did that snap back as expected, or did it turn for the worse? What was going on there during the quarter? Hey, this is Douglas. I'll take that one. Of course, we've been in close contact with the team there. In Q1, it was mostly impacted by an extended holiday for what they call, you know, the Spring Festival, which is the Chinese, you know, our New Year Eve. It was the first time after several years, you know, since the COVID pandemic that they were able to travel around, visit the family. Most business shut down when that was extended. Okay. That impacted Q1. Going forward, we see an improvement compared to Q1. But of course, we're monitoring the market closely, you know, the overall Chinese economy and how the overall market keeps going there. All right. Okay. All right, thanks. Another area, can you refresh my memory on the challenges at Juarez? Is that just a labor issue or is there a process stuff involved? I don't recall the details on that. I'll take that one too. First of all, you know, I since I took this role in early January this year, I've been going to Juarez myself on an often basis there in close contact with the leadership and the team there. I would highlight 3 main factors affecting the Juarez. You know, first one is regarding labor. You know, the high labor turnover that we have there in the region is kind of a region thing there that is affecting us because we need high-skilled labor. We're not only an assembly type of company. That's number one. Number two is associated with process capabilities that we have with new business launches. We're facing some lower efficiencies regarding this capability. The third one, some struggles and also inefficiencies because of the machines condition and overall efficiency in some other areas. We have a very clear assessment of what's going on. We understand. We have a plan, okay? It's a complex issue, of course. Not everything is under our control. Some of the solutions and the plans that we have are linked to conversations we are having with our customers there. That's how we're gonna address it. All right, great. Thanks for the color on that. One quick one for Mike. Mike, I didn't see the any comment on capital expenditure outlook for this year. Is it still in the $17 million range or? I think the original outlook we gave was $16 million-$8 million of net capital expenditures, which would be net of, you know, about $2.5 million of proceeds from equipment sales from Taunton and Irvine, that we expect. I would say we're still in that range. All right, great. All right. That's all I have for now. Thanks. This concludes your question and answer session. I would like to turn the conference back over to Mike Felcher for any closing remarks. Thank you. I'd like to thank everyone for joining the call today. I certainly look forward to speaking with many of you on follow-up calls later in the day. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.