Hello, and Welcome to Superior Industries Q3 2022 Earnings Teleconference Call. My name is Priscilla, and I'll be your coordinator for today's event. Please note, this call is being recorded, and your lines will be on listen-only. However, you will have the opportunity to ask questions at the end during the Q&A session. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. We are joined today this morning by Majdi Abulaban, President and CEO, Tim Trenary, Executive Vice President and CFO, and Joanne Finnorn, Senior Vice President, Investor Relations. I will now hand you over to your host, Ms. Joanne Finnorn, to begin today's conference. Thank you. Good morning, everyone, and welcome to our Q3 earnings call. During our call this morning, we will be referring to our earnings presentation, which along with our earnings release, is available on the investor relations section of Superior's website. I am joined on the call by Majdi Abulaban, our President and Chief Executive Officer, and Tim Trenary, our Executive Vice President and Chief Financial Officer. Before I turn the call over to Majdi, I would like to remind everyone that any forward-looking statements contained in this presentation or commented on today are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to Slide 2 of this presentation for the full safe harbor statement and to the company's SEC filings, including the company's current annual report on Form 10-K for a more complete discussion of forward-looking statements and risk factors. We will also be discussing various non-GAAP measures today. These non-GAAP measures exclude the impact of certain items and therefore are not calculated in accordance with U.S. GAAP. Reconciliations of these measures to the most directly comparable U.S. GAAP measures can be found in the appendix of this presentation. With that, I'll turn the call over to Majdi to provide a business and portfolio update. Thanks, Joanne, and thanks everyone for joining our call today to review our Q3 results. I'll begin on Slide 5 with the highlights. Our team delivered another quarter of solid results, including double-digit growth in value-added sales and Adjusted EBITDA, along with substantial margin and content per wheel expansion. This while facing continued industry supply chain disruptions, depressed volumes, and commodity cost increases. In line with the plans we laid out in our value creation roadmap, we have remained focused on driving operational improvements across the enterprise while continuing to collaborate with customers and suppliers on inflationary cost recoveries and other cost reduction solutions. We also continue to leverage our differentiated portfolio to capture demand for premium wheels, expanding content per wheel in the quarter by 10%. These combined efforts have enabled us to achieve EBITDA margins on par with pre-pandemic levels while overcoming persistent macroeconomic headwinds, including inflationary cost increases as well as unfavorable FX. This is a testament to the capabilities of our leadership team as well as our operational strength. While these headwinds continue to weigh in on our operating environment, we are seeing some signs of improvement in industry production, which we expect to continue heading into 2023. During the quarter, we also maintained focus on cash generation and preservation through prudence with capital expenditures and working capital management. This has enabled us to achieve a historic low net debt of $456 million and to maintain strong liquidity of $283 million. Moving on to Slide 6, which highlights regional industry production. While industry production is improving with notable increases on a year-over-year basis in both North America and Europe, sequential comps actually point to continued industry supply chain challenges. Having said that, demand for our innovative portfolio of products continues to play out, manifesting itself in sustained growth above market. As I mentioned last time, this trajectory has not necessarily been linear, but it has equated to long-term outperformance and profitable growth. In fact, our portfolio has delivered a compound annual growth rate of 7% since early 2019. We expect this trajectory to continue as markets recover further. In addition to recovering markets, our ongoing focus on enhancing our portfolio technologies will continue to serve as a tailwind, driving growth over market. Consumer demand for lighter and larger wheels with premium finishes has remained strong, and our ability to meet this demand has been a key driver in our long-term outperformance. Moving on to Slide 7 to address our current operating environment. While global industry production remains significantly below pre-COVID levels due to the lingering challenges addressed on the left side of this chart, we are beginning to see some improvements. Compared to prior year, global production volumes in our markets increased 28%. Supported in part by the easing of semiconductor supply chain constraints. That said, we expect the tailwinds shown here, including low dealer inventories, a record aging fleet, and pent-up demand to continue to propel our business forward. While an inflation-driven demand destruction scenario is plausible, we do not see that playing out. On to Slide 8 to discuss our progress against our value creation roadmap. Our team continues to do an outstanding job executing on the priorities laid out on this slide. This is evidenced by the strong financial performance we have delivered throughout the year. In fact, I just came back from a visit to our operations in Mexico, where we are operating at best-in-class quality levels and where our team's taking continuous improvement to a whole new level. Dozens of Master Black Belts, Black Belts, and Green Belts, solving problems and delivering exciting bottom-line savings. A case in point, our oldest plant in Mexico recently received a quality award from Nissan and was named GM Supplier of the Year. We are very proud of their achievements. Equally important is the commercial discipline we have instituted throughout the company. This is not a priority of our sales team only. It is the priority of the entire organization. Teaming up with customers on cost reduction ideas, as well as collaborating on cost recovery dialogues. Here we have made very good progress. In terms of profitable growth, our portfolio continues to play out. As I mentioned last time, now more than ever, and it's exciting here, our local-for-local manufacturing footprint continues to be the choice for customers pursuing localization in region. In fact, just this week, we launched a localization effort in North America of a major program for a European OEM operating in the U.S. Again, another exciting evolution here of the strategic value of our footprint, our in-region footprint. Slide 9 provides a bit more color on the drivers of our long-term content per wheel growth. Adoption of electrification, lightweighting, aerodynamics, and consumer preference for larger wheels with premium finishes continues to accelerate. A case in point, since 2019, we have tripled the number of wheels with lightweighting applications in North America and doubled the same in Europe. Further, our premium wheel mix grew from 35% in 2019 to 49%, now. In fact, if you look at wheels larger than 19 inches, that has gone from 19% to 52%. In total, adoption of these technologies has enabled us to deliver a staggering 30% increase in content per wheel over the last few years. Slide 10 showcases some of our most recent launches, reflecting increasing adoption of our premium offerings among key OEM customers on a wide range of platforms, from traditional internal combustion vehicles to electric vehicles, including the Ford Mustang Mach-E and Mercedes-Benz G-Class shown on this slide. These product launches continue to reflect the evolution of consumer preference as the market continues to move towards our premium offerings. Turning on to Slide 11, which highlights the collective effort of the Superior team. These are tangible results of executing our strategic priorities. With unit shipments still historically low compared to pre-COVID levels, we expanded EBITDA margins, net sales per wheel, and content. This demonstrates the agility of our business as we are achieving these results in a volatile market environment, and also demonstrates the substantial upside ahead as industry volumes improve. Slide 12 is actually the same information, but it's on a year-to-date basis. It highlights a couple of things. It highlights the lumpy nature of customer recoveries, but more importantly, it highlights the run rate EBITDA of our business, which if you go back historically, in a normal volume environment, is about 25% EBITDA. We're there. Slide 13 addresses our full year 2022 outlook. We are maintaining a conservative view of industry vehicle production volumes versus current IHS outlook. We expect modest industry improvements for the remainder of the year. In line with these expectations, our guidance remains unchanged and has not changed all year, with Adjusted EBITDA anticipated in the range of $165 million-$185 million, and cash flow from operations of $105 million-$150 million. Tim will elaborate on our expectations further in his remarks. In closing, I am proud of our team's performance in this past quarter and throughout the year. We are in the third year of industry depressed volumes and supply chain disruptions. We have executed day in and day out in the face of these challenges. We look forward to continuing this momentum and to generate further value for our shareholders as the year comes to a close. Now I will turn the call over to Tim. Tim? Thank you, Majdi, and good morning, everyone. Commodity cost increases, especially the cost to alloy aluminum and the cost of energy, general inflation and global supply chain instability and constraints continue to burden the company's cost structure. The cost of energy has, however, come down from recent highs, and the stability of global supply chains has generally improved. Light vehicle production in our markets continues to be depressed due to component shortages affecting our customers' vehicle production. ECI, our established and disciplined enterprise cost improvement program, supported by our expanding Lean Six Sigma capabilities, what we refer to internally as CI or continuous improvement, continues to support our financial performance and operations in this business environment. We are pleased with the execution of our cost out programs and the performance of our manufacturing, commercial, and procurement teams. Let's look at Slide 15, Q3 financial summary. The company sold 3.8 million wheels in the quarter, 8% more than in the prior year period. Net sales increased to $406 million for the quarter, compared to $311 million in the prior year period. The increases in net sales is primarily from higher aluminum costs passed through to our customers. The cost of aluminum and the cost to alloy the metal remains elevated, has come down from recent highs. Value-added sales increased to $178 million for the quarter, compared to $162 million in the prior year period, due in large part to more wheels sold, but also customer recoveries of inflation offset in part by the weaker euro. We reported a net loss of $0.4 million for the Q3, or a loss per diluted share of $0.35, compared to a net loss of $7 million, loss of $0.61 per diluted share in the prior year period. The year-over-year sales bridge is on Slide 16. Volume, price, and mix benefited value-added sales by $31 million in the quarter, in large part because of the higher wheel sales compared to the Q3 of last year and customer recoveries of cost inflation. Aluminum costs passed through to our customers was up $79 million compared to the prior year because of the elevated cost of aluminum and the weaker euro burdened value-added sales by $15 million. On Slide 17, Adjusted EBITDA increased to $36 million in the quarter compared to $30 million in the prior year period. The Adjusted EBITDA margin for the quarter was 20%, an acceptable margin on $178 million of value-added sales. Volume, price and mix and foreign exchange were inconsequential. Recovery of extraordinary cost inflation from our customers supplemented Q3 performance of $12 million. Metal timing was a $6 million burden in the quarter compared to a $7 million benefit in the prior year period. The impact of metal timing tends to net out over time. Slide 18, Q3 cash flow. Cash flow provided by operating activities was $17 million, compared to negative cash flow provided by operating activities of -$46 million in the prior year period. This improvement is largely due to significantly better working capital performance in the quarter compared to the prior year period. Net cash used in investing activities decreased to $11 million compared to $20 million in the prior year period. Capital spending this quarter is low because of timing of expenditures. We still expect capital expenditures on the order of $75 million for the year. Cash payments for non-debt financing activities was $4 million, flat compared to the prior year. Free cash flow for the quarter was therefore $2 million, compared to net free cash flow of $70 million in the prior year period. An overview of the company's capital structure is on Slide 19. Funded debt was $577 million at quarter end, $39 million less than year-end 2021. The decrease results primarily from the weaker euro and therefore depreciation of the euro-denominated debt. Net debt decreased to $456 million, $47 million less than year-end 2021. Funded debt and net debt have continued to decline this year and are the lowest since the Uniwheels acquisition. At the present somewhat elevated cost of aluminum, the company has a larger investment in metal on the balance sheet than is normal. We size this incremental investment at about $8 million at quarter end. This will come back to us as aluminum cost continues to normalize. Liquidity was $283 million at quarter end. The net maturity profile is depicted on Slide 20. We have no impending maturities of funded debt. Revolving credit facilities which mature in May and October of 2023 were undrawn. The company is in compliance with all loan covenants. The capital markets have pulled back, especially the public leverage finance market. Fortunately, the company isn't compelled to do anything at this moment. With the passage of time, we intend to continue to prove out the operating model, improve our financial performance, and to delever the balance sheet. We stay close to our financing relationships and intend to pursue a refinancing of the company at the appropriate time. The company's 2022 financial outlook is on Slide 21. The timing of the industry recovery and the Ukraine conflict could have a meaningful impact on light vehicle production in the remainder of the year, and therefore our financial performance. The euro is depreciated vis-à-vis the dollar and is adversely affecting sales and EBITDA, but has benefited the funded debt. Global supply chains continue to be unstable and are sometimes constrained, but have improved. The cost of manufacturing inputs, especially energy, are uncertain. Energy prices have, however, come down from recent highs. The amount and timing of the recovery of extraordinary cost inflation from our customers is also uncertain. We do expect a modest recovery in light vehicle production in the remainder of the year and beginning of next year. Having said all of that, we expect to sell 16 million-17 million wheels in 2022, with net sales in the $1.6 billion-$1.7 billion range, and value-added sales in the $748 million-$800 million range. We expect Adjusted EBITDA in the range of $165 million-$185 million, and cash flow from operations to be $105 million-$150 million. We expect capital expenditures on the order of $75 million. We now model a 35%-45% effective tax rate for the year. In closing, we delivered a solid quarter. Value-added sales were up, EBITDA was up, content per wheel was up, and net debt was down. Discussions with our customers regarding recovery of extraordinary cost inflation are ongoing. There can be no assurance that we will have continued success, and the recoveries may be lumpy. Customer recoveries of extraordinary cost inflation supplement our self-help programs, ECI and CI. This, taken together with the company's demonstrated ability to maintain commercial, procurement, and operations discipline should put Superior in a position to benefit significantly from the operating leverage in our business when light vehicle build recovers. This concludes our prepared remarks. Majdi and I are happy to take your questions. Priscilla, back to you. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll now take our first question from Gary Prestopino from Barrington Research. Please go ahead. Your line is open. Hey, good morning, everyone. [crosstalk] Hey, Gary. How are you? A couple of questions here. Good, just fine. Hey, you know, in speaking with some other tier one suppliers, they've said that their order patterns have been very erratic and are starting to improve. I would assume that you're starting to feel that same thing, less erratic orders and, you know, from your end users. Even some of these tier ones are saying the automakers order things and then just don't pick them up in time. Yeah. Gary, you know, just two things, and I'll speak to the erratic issues of orders. Actually, this year is surprising. I mean, we all felt that the automakers would get a handle on these microchip shortages. Volumes have come in short of what you expected, what I expected. Far short of it, I guess, right? You know, the year was supposed to be a 20% year, and it could be just a 5% year. I would say that the erratic nature of orders has moderated a bit, but it's surprisingly still there. I think, Gary, it's largely because the problem is now not only a microchip problem. It's actually broader to other supply chain factors that some customers that you're aware of have run into a couple of months ago, having to build 50,000 vehicles and not being able to ship them. I would say it has moderated, but it's still there. The issue for us is this, the erratic nature of these orders cause us to increase, to incur costs. Costs, frankly, that we cannot afford and costs that we are in discussions with our customers on recovery. Okay. On Slide 9, when you highlight all of the various growth aspects there, with lightweighting, premium finishes, et cetera, is that within your actual portfolio or is that just within the industry? No. Actually, the blue bars are our portfolio. The industry versus this data, Gary, versus 2019. So if I was at 2019 you would show that that's down 15%, right? So the market is down 15%. Our lightweighting applications are up 15%. It's a very exciting story. Actually, our view is when you look at these drivers of content both in our business, they actually accelerate. You know, in my remarks, I pointed to a couple of statistics about, you know, if you compare lightweighting, where it was just 24 months ago versus now, you know, it triples in some cases and doubles in others. But What I didn't say in my remarks is what percent of our portfolio has lightweighting applications in it. It's less than 15%. We're far, far from where we can be and where we will be as these technologies continue to be adopted by our customers. Okay, that's great to hear. Then, lastly, and I'll let somebody else jump in. You signed a pretty big deal with Toyota. You announced it last quarter. When does that start ramping up? In 2023? Yeah. It starts ramping up. It's not Toyota, by the way. We didn't disclose the customer, actually. Sorry about that, Gary. We did not disclose it. It starts in Q2 of next year. Okay. I don't know where I got Toyota then. I must have heard that from somewhere else. Okay. Thank you. Thank you, Gary. [crosstalk] You're welcome. Once again, if you would like to ask a question, please press star one on your telephone keypad. We have Gary again. Please go ahead. [crosstalk] Your line is open. Yes. Thank you. You know, obviously some questions on the proverbial elephant on your balance sheet. Do you have any number on what the senior notes are trading at in the market right now? They're denominated in euros, correct? Yes, they are, Gary. It's Tim. All right. So they [crosstalk] What are they trading at the moment? Okay. If I may, Gary, both are elements of our funded debt, the term loan and the funds over a year, what you refer to as the senior notes, unsecured notes. The fact that they trade below par is a reflection of the capital markets in general. In other words, if you look at the amount by which those securities have traded down, it roughly reflects the amount of decline necessary in order to reflect the yield in the marketplace today for those types of securities. Said another way, it's a reflection of the marketplace, not a reflection of the marketplace's perception of our paper. Right. If I see on Slide 19, you've got them on the books at $213 million, they're EUR 217 million. That's a translation thing. Do they trade in the market at all? I guess what I'm trying to get at is [crosstalk] They do. Okay. Yeah. [crosstalk] Are they trading above par? No, they're trading below par. At a discount to par. Okay. Any thoughts to maybe starting to use a little bit of excess cash flow to start buying back some of the notes, if at all possible, given where the dollar is r elative to the euro? Yeah. We have given that some consideration. There are at least two downsides if you were doing that. Because they are so closely held and therefore the market for them is so illiquid, any transaction in these securities tends to move the value of the securities significantly. That's a roundabout way of saying, were we to undertake that exercise, our ability to buy in these notes at the discounted price is a meaningful amount of it that is not very great because it would just, in my judgment, quickly move the value of the securities. That's number one. Having said that, if one considers the value that the company might create were it to undertake what I just said and to bring in what I would consider a small amount of the notes, I just think it's better for the company to maintain the flexibility it enjoys with its liquidity right now. On balance, to date, given where the notes are trading, we've decided not to do that. If the notes traded down further or if the euro depreciated further, that might change. What's the yield on those notes right now? [crosstalk] We'll get that for you before we end the call here. Jack, can you do that for me? Okay, no problem. You can get that on the follow-up call. That's all I have. Thank you. Thanks, Gary. Thank you. Once again, if you would like to ask a question, please press star one. We'll now take our next question from Graham Cremer from Phase Investment Advisors. Please go ahead. Your line is open. Great. Thank you. Hey, just a question. When I look at the value add sales per wheel, obviously not adjusted for the numbers you present here. It looks like North America that has declined, let's say 10% this year. Let's say 46-42. Whereas in Europe, it's been going up quite a bit. Could you just comment on that trend? Is that mix, or am I doing my math right here? Gary, Gray, a couple of points. First, these numbers are adjusted for FX, okay? Just to be sure. Second, when you look at the year-on-year column, in North America, mix was very, very strong last year. In fact, you know, these guys blew it out of the water. You see some moderation this year, and you see Europe catching up. Overall, Europe was always a higher content story on average than North America, but the growth in both sides of the ocean is very, very comparable. Okay, okay. Just in terms of the trends, you know, just looking at the unit sales again, I see, I mean, obviously Europe is weak. I know there's a lot going on over there, but, you know, we had a pretty big sequential decline in 3Q, which I don't think is the norm seasonally. What are your expectations in that part of the world as far as, you know, just what are you hearing about, you know, how the [crosstalk] t he demand is shaking out? I mean, that's a very good question, and Europe obviously has been a surprise to all of us, especially given what happened in Ukraine, right? Year to date, Gray, if you look at Europe, the industry grew at 2%, right? If you look at North America, the industry grew at 11%. You combine, our markets grew about 6% year to date. You know, we have said we think the year will close out more like 5%. That implies potentially a flat Q4. Q4 last year was stronger than Q3. What we are seeing is the OEMs continuing to struggle much more in Europe than in North America, with supply chain issues. Actually, to Gary's point, not only we're not seeing the volume, but also the erratic nature of schedules is still there and surprisingly there, Gray. Okay. Is aftermarket a factor here at all or not, as far as Europe goes? It's a good catch. The aftermarket for us last year. Last year was a phenomenal growth story for us, 24% growth year-on-year. Largely because of a lot of, well, I wanna say most of, the market is served out of Asia, not just China, but the rest of Asia. There were a lot of transportation issues and, you know, we had to step in and help our customers. We actually gained quite a bit of share in that process. What you see really is a moderation of where we were. Our position in the aftermarket is very strong overall in Europe. I mean, by market share-wise, we believe we are number one. You know, our market share in Germany actually is close to 25%. We continue to maintain that. That business has always served as a, you know, as an offset to some of the volatility we saw on the OEM side. Good business for us, but you're seeing some moderation back to, let's say, where we were in 2019 levels. Okay, that's great. That's all for me. Thank you. Thank you. Well, Gary Prestopino, it's Tim Trenary. The bonds, the Euro bonds are yielding today 15%, 15. Thank you for the questions. As there's no further question at this time. I'd like to turn the conference back to you, Mr. Majdi Abulaban, for any additional closing remarks. Thanks. Thanks everyone for joining our call today. In closing, I am very encouraged by our results this quarter and through our view. We look forward to continuing to execute on our strategic priorities and delivering long-term profitable growth. To the Superior team, thank you for your hard work, for your perseverance, and for continuing to take care of each other during these challenging times. Thanks again for joining, and have a nice day. Thank you for joining today's call. You may now disconnect.