Welcome to the Superior Industries 1st quarter 2023 earnings call. We are joined this morning with Majdi Aboulaban, President and CEO, and Tim Trenary, Executive Vice President and CFO. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only mode. However, you'll have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over the call to your host, Tim Trenary, to begin today's conference. Thank you. Thank you, Caroline. Good morning, everyone, and welcome to our first quarter 2023 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 Aboulaban, our President and Chief Executive 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 two 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, thanks, Tim, and thanks, everyone, for joining our call today to review our first quarter results. I will begin on slide five. We are pleased with our first quarter results. We delivered strong growth in a tough environment and maintained focus on customer recoveries while generating cash to continue to enhance our financial flexibility. Although our environment remains volatile, we have seen a modest recovery in industry production in North America and Europe as supply chain constraints begin to ease. That said, a significant portion of industry growth in North America was driven by fleet sales to rental companies, an area where Superior has limited content. Further, we have seen declines in the aftermarket in Europe due to warmer winter and other factors I'll discuss later. That said, in the quarter, we grew year-on-year FX Adjusted Value-Added Sales by 9% and Content per Wheel by 16%. Our team continued to stay focused on what we can control, commercial discipline and operational performance, while continuing to execute our portfolio strategy. I am especially pleased with the progress we have made to align pricing with our input cost reality, which has supported ongoing growth in Value-Added Sales while mitigating the impact of continued macro headwinds and unfavorable shifts in product mix. As a result, over the last 12 months, our Value-Added Sales have outgrown the larger markets. Adjusted EBITDA in the first quarter of $46 million remains near historically high levels despite lower unit shipments. Margins as a% of Value-Added Sales contracted year-over-year, largely due to the substantially higher recoveries we captured in the first quarter of 2022. We continue to take the necessary actions to enhance our portfolio to support long-term profitability. Here we are taking a close look at our offerings and book of business to prune parts that are underperforming and to cultivate those that are supporting long-term growth. We refer to this as our 80/20 process. Our strategy to capture secular demands for our differentiated portfolio has continued to play out. Content per Wheel has grown year-over-year for 16 consecutive quarters, with large diameter wheels now making up over 52% of our shipments. As demand for lighter wheels has grown, bolstered by the secular shift to EVs, our lightweighting content has increased roughly 20% annually since 2020. Our efforts to capitalize on these secular trends while also taking a disciplined approach to working capital management and capital expenditures has translated to solid cash generation, in turn strengthening our financial profile. In Q1, we delivered $39 million in operating cash flow, reducing net debt to $421 million, the lowest level in over 5 years. In terms of what we see in the industry for the remainder of 2023, we remain concerned. Given the mixed challenges we are seeing in North America, coupled with lower aftermarket sales in Europe and an increasingly uncertain macro environment, we are narrowing our full-year outlook. We believe it is prudent to be conservative until we have more clarity on the trends within our regions. As such, we now expect limited vehicle production growth in our markets and are narrowing our sales, Value-Added Sales, and Adjusted EBITDA ranges. Our cash flow guidance remains unchanged, which we plan to maintain through disciplined working capital management and lower CapEx spend. Tim will provide more details on this. Moving on to slide six. Our strong position on premium platforms has continued as consumer preference moves towards larger, more sophisticated wheels with premium finishes. This is evidenced by some of the recent launches you see on the left side of this chart. Importantly, as you can see on the right side of the chart, we have been successful with customers in aligning product pricing with input costs of our business. This improved pricing, combined with growth in premium content, has resulted in substantial growth in Content per Wheel. Specifically, content growth and price have improved our Content per Wheel by 17% compared to 2021. Fundamentally, portfolio and commercial discipline continue to underpin the long-term trajectory of our content expansion and profitability of our business. Moving on to slide seven. We wanted to give some perspective on the current operating environment. We are seeing global industry production improve with Q1 volumes growing 17% over the previous year, yet still remaining below pre-COVID levels. This recovery has been supported by the easing of supply chain headwinds. Having said that, volatility, volume uncertainty, and persistent inflation continue to challenge our operating environment, particularly the unfavorable mix in North America and the decline of the aftermarket in Europe. We continue to be well-positioned to leverage industry preference for shorter supply chain through local for local footprints, along with secular demand for premium wheels. On to slide 8. Here you can see our growth in relation to the wider industry during the quarter. In the global regions where we operate, industry production grew almost 17%, with production among our key customers growing 13%. As noted here, we are currently trailing with our FX-Adjusted Value-Added Sales growing 9% during the quarter. Adding further color on the right side of the chart. North America growth is mostly driven by fleet sales, where Superior has low content. Further, our largest customer, GM, saw a 2% decline in production in the quarter. In Europe, as I mentioned earlier, the aftermarket has seen a significant decline driven by general unwind of post-COVID gains, higher wholesaler inventories, a warm winter, and consumer affordability issues. In summary, aftermarket declines and North America mix have been the main drivers here. Moving on to slide nine. Candidly, we are not betting on industry recovery. We are taking action. We have launched several initiatives in response to these macroeconomic shifts that has impacted our business. Through execution of the priorities laid out on this chart, we plan to drive improvements to both our portfolio and our overall operations. This begins with reducing overhead and administrative expenses. Our target here is 10%, and we are well on our way. We have taken a restructuring charge in the quarter. Further, we continue to use the 80/20 approach to prune our portfolio and further focus on profitability. We will continue to aggressively manage working capital while optimizing capital expenditures to strengthen cash generation. For example, we are consolidating our aftermarket warehouses in Europe to reduce inventory. In terms of CapEx, we are focused on investments with short payback periods. ECI initiatives are being implemented to offset the impact of wage inflation. Lean and continuous improvement capabilities have matured in our business, and we are reaping the benefit of our investment in Green Belts and Black Belts. Finally, we are driving flexibility in our plants to support business across the portfolio. For example, all of our plants in Mexico now can support 20-inch wheel production. In closing, I am pleased with how we started the year and how our teams have continued to manage through operating headwinds. Our content story is playing out, and we are making great progress on getting our pricing right. Moving ahead, our focus is on shifting to optimized cost, pruning our portfolio, and strengthening cash flow. We look forward to building on this momentum to create greater shareholder value in the coming quarters. Now I will turn the call over to Tim to provide more details on our results. Tim? Thank you, Majdi, and good morning, everyone. The recent supply chain constraints the automotive industry has endured have moderated somewhat. The barrier now to light vehicle production perhaps returning to pre-COVID levels is significantly higher new vehicle prices, higher financing costs, and consumer inflation and recession concerns. Vehicle production, although somewhat improved, is still about 13% below pre-COVID levels in our markets. We have and will continue to pursue opportunities to adjust our manufacturing and administrative cost structures to reflect the reduced level of light vehicle production. This quarter, we recognized a $5.3 million charge arising from a reduction in force throughout the company, which will reduce annual payroll costs by approximately $4.4 million. This reduction in force is part of a larger initiative to reduce manufacturing and administrative overhead by $10 million annually. Let's have a look at the quarter, page 11, first quarter financial summary. Wheels sold in the first quarter were 3.9 million units, down 6% from the prior year period. With respect to North America, production of fleet vehicles was higher than usual. Rental cars tend to have an unfavorable mix of premium and standard wheels. In Europe, year-over-year decline in units is due to the aftermarket business, which is very soft because of warmer weather, increased use of all-season tires, and consumer inflation and recession concern. Net sales decreased to $381 million for the quarter, compared to $401 million in the prior year period. Value-Added Sales increased to $203 million for the quarter, compared to $198 million in the prior year period. We incurred a net loss of $4 million for the first quarter, or a loss per diluted share of $0.49 compared to net income of $10 million, or earnings of $0.04 per diluted share in the prior year period. The first quarter year-over-year sales bridge is on page 12. To the far right, aluminum cost passed through to customers was down $33 million or by 16% compared to the prior year period. The cost of aluminum has declined significantly from a year ago. Value-added sales increased by $14 million or 7% compared to the prior year period. More than all of this increase is recovery of cost inflation and higher premium wheel content. The impact of currency on net sales was $7 million. On page 13, first quarter year-over-year Adjusted EBITDA bridge. Adjusted EBITDA for the quarter decreased to $46 million compared to $49 million in the prior year period. The Adjusted EBITDA margin for the quarter was 22% compared to 26% in the prior year period. The margin in the first quarter of last year was boosted by the timing of customer recoveries. Fewer wheel sales in the quarter compared to the prior year period and metal timing contributed to the decline. An overview of the company's first quarter 2023 free cash flow is on page 14. Cash flow from operating activities was $39 million compared to $45 million in the prior year period. This decline reflects the lower earnings net of improved working capital performance compared to the prior year period. Cash used by investing activities declined to $16 million from $18 million. Cash payments from non-debt financing activities increased to $7 million from $5 million. Free cash flow for the quarter was therefore $17 million. An overview of the company's capital structure as of March 31, 2023 may be found on page 15. Cash on the balance sheet at quarter end was $229 million, an increase of $95 million from the prior year. Funded debt was $650 million at quarter end, and net debt was $421 million, a decrease of $56 million compared to the prior year and the lowest since 2017. The decrease is partially attributable to a decrease in the euro-denominated notes due to the weaker euro. As of the end of the first quarter, liquidity, including availability under the revolving credit facility, was $246 million. Superior's debt maturity profile as of March 31, 2023 is depicted on page 16. The revolving credit facility was undrawn at quarter end. We are in compliance with all loan covenants and have no significant near-term maturities of funded debt. The $250 million of SOFR-based interest rate swaps we entered into a year ago in anticipation of the term loan refinancing this past December are in the money because of the Fed's rate hikes. Annual interest expense is therefore about $4 million less than it otherwise would be. The company's full year 2023 financial outlook is on page 17. We enjoyed considerable success in recovering cost inflation in 2022 and pivoted late last year to negotiating appropriate price increases to offset the cost of inflation, the cost of OEM production schedule volatility, and lower fixed cost absorption on lower light vehicle build. These negotiations are ongoing. While the cost of energy, gas, and electricity has come down dramatically, it does remain elevated in Europe. Conversely, the cost of energy in North America has normalized. The aftermarket in Europe is far softer than we anticipated. In North America, given our limited participation on fleet vehicle platforms, we are seeing an adverse impact on wheel sales. We continue to be somewhat pessimistic with respect to recovery of light vehicle production in our markets, in part because of significantly higher new vehicle prices, higher financing costs, consumer inflation and recessionary concern, and increasing macroeconomic uncertainty. Against this backdrop, we are narrowing our guidance ranges for 2023 to 15 million-15.8 million wheels, net sales of $1.55 billion-$1.63 billion, Value-Added Sales of $755 million-$795 million, and Adjusted EBITDA of $170 million-$190 million. We continue to expect cash flow from operations of $110 million-$130 million. We are lowering expected capital expenditures to approximately $65 million. We continue to model a 25%-35% effective tax rate for the year. In closing, we delivered a solid quarter, but are wary of increasing macroeconomic uncertainty in the back half of the year. This concludes our prepared remarks, and Majdi and I are happy to take your questions. Caroline? Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line, Gary Prestopino from Barrington Research. The line is open now. Please go ahead. Hey, good morning, all. Hey, Gary. A couple of questions here. Number one, Majdi, when you're talking about pruning the portfolio, I believe a while back you had said that you would be willing to put more low or some lower margin wheel production into the mix just to sap up some overhead capacity. I'm just wondering is that what you're looking to prune out at this point? Maybe you could help us just understand what you're doing there. It's an excellent question. You know, let me just do the backdrop first and maybe give you more color on this. You know, when I think of pruning, it's fundamentally a best practice Gary, right? If you go back to what this team has been focused on and what this team has been executing for the last three years, and you're intimately familiar with it. We have been working hard to get the portfolio right. We've been working hard to get the footprint right and to get the costs right. Obviously working hard on getting the customer base right. Maybe you call those low hanging fruit. I don't know. We've done very well. Now my view and what we're learning is that we see an opportunity to get more granular in our business. you know, my view, as I've said many times, we deliver the best product in the industry. I believe that we are the most competitive in the industry because of the things we talk about, footprint in Poland with all of the production we have is in Mexico. Price has to deliver the right return on our business. Now that's one backdrop, right? Looking closely with more granularity at the SKU level with the 80/20. What 80/20 is 20% of your portfolio delivers 80% of your profit. Now this, while at the same time we are concerned about visibility, right? We're concerned about visibility and concerned about volumes not returning to pre-COVID levels. We see this as an opportunity to improve margins on products that is underperforming. Without going into detail, we have done well with customers where we have had the right visibility. We also see this as an opportunity to get ready when things don't go right. Does that help? Yeah. I t does. I mean, you know, I know you can't go into much granular detail, but all right. This $4.4 million reduction in payroll that's gonna annualize or that you took, will that immediately start to show up in Q2 numbers or does that look like something that would be more of an impact in the back half of the year, as well as your $10 million annual cost savings target? Are we looking at that, Tim, as being more back-ended? The $4.4 million reduction in payroll costs, Gary, starts almost immediately without exception. We're already, you know, benefiting to some extent from that. You know, basically starting now we're getting the benefit of that. The $10 million, this $4.4 is a part of a broader objective, as Majdi outlined, to reduce our manufacturing. Right. Administrative burden. That is being layered in. We already have taken a number of actions even in the first quarter to reduce non-payroll expenses and some incremental payroll expenses over and above the $4.4 that I just mentioned. This will layer in during the year. In the second quarter, while we strive, you know, to achieve the full $10 million, frankly, it's gonna be a little tough to get there. We will get there reasonably quickly, but we won't be running on an annualized basis immediately. Okay. That's helpful. Just one more comment and I've got to jump. You know, throughout your narrative, you mentioned about vehicle production needs to get back to pre-COVID levels to, you know, start having a much more positive impact on the company. I mean, with that kind of thought process, I mean, what I'm reading is that or possibly seeing, and maybe I'm wrong, is that I don't think the OEMs are gonna start producing cars at the 16.5, 17 million unit level at least in North America. I think because they're finding the fact that there's scarcity of vehicles out there is, you know, highly profitable to them. I mean, do you concur with that? I'm just trying to get an idea of, you know, what would be the sweet spot... Yeah. -of production, at least in North America, for you guys to, you know, start putting up consistent growth in EBITDA. Gary, I mean, this is the old question here that emerged in recent months about which narrative do you subscribe to? Is it the pent-up demand where, you know, the fleet is so old and so many vehicle production has been lost, or is it the fact that those vehicles are getting so expensive that people can't afford to buy them, right? The pent-up demand theory is still there. Eventually, it will play out. Eventually, it'll have an impact on the industry. The third piece is, will the OEM have the discipline to do what you just described? I believe that volumes will get back to pre-COVID levels eventually. It will take some time. What we're talking about more immediately, Gary is, you know, we had a solid quarter actually on all dimensions. From content growth standpoint, from pricing standpoint, we did grow the business at 9% in a very tough environment for us, you know. Right. The aftermarket business in Europe was not our friend. Mix in North America was surprisingly not our friend. I mean, you know, we normally do extremely well in North America, and frankly, we're still seeing, you know, these fleet sales catching up. What you're hearing from us is what we're seeing. We are being conservative in our guide so that we can go ahead and take action on costs and prepare for the worst and hope for the best. Okay. All right. Look, I gotta jump. I'll look forward to speaking with you guys later. Thank you. Thank you. Thank you. We will take the next question from line. Mike Ward from Benchmark, the line is open now, please go ahead. Hi, Mike. Thank you very much. Good morning, everyone. Two things. First off, is there any difference? I know there's good fleet and bad fleet. you know, a big part of the growth in North America in the first quarter was fleet. Is there any difference in content for you for fleet or non-fleet, or does it depend on the fleet vehicle? The second thing, I'm just curious about what you're seeing in Europe, especially Germany, and some of the trends. Yeah. There is a big difference actually, Gary. Generally, you know, it's just an overarching statement, wheels on fleets tend to be lower content, less premium, much less premium. They tend to be more passenger cars and less larger SUVs. Yes, there is a significant difference. Listen, what we're seeing in Europe, I mean, obviously, you look at IHS numbers, Europe came in Q1 strong, I mean, north of 20%. Yeah. We came in north of 20%. I mean, both. In our case, you know, we have a sales segment that is the aftermarket, for the reasons I described. It's really one of the reasons is inventory at the wholesalers of these wheels was so high as we closed out the year. You add to it these affordability issues and the surprisingly warm winter. That had a significant impact on us. We do see Europe recovery. If you look at the overall forecast for the year, Gary, I mean, IHS would say 8% in Europe, 5% in North America, combined 6%. Okay, we don't see that because we don't have the right mix, and the aftermarket is not our friend. We're guiding for very low single digits. Okay. Now it in Germany, it looks like they started out incredibly strong in the first quarter. Is that just? That is correct. Okay. Now you're not as confident that's gonna continue in the second half or? No, I think it's gonna continue to some extent. Again, I'll go back to the, you know, just to quote not my numbers directly, but in terms of outlook, IHS-. Yeah. You know, Q1 was 20% in Europe, and IHS on average, you know, they're saying Q2 is 7%, and the balance of the year is gonna be fairly flat because last year was the second half was stronger. Are you gonna see from a growth standpoint, these types of numbers? No. In terms of units, you know, similar units in the coming quarters. Okay. Are you seeing any change with manufacturers, their behavior as far as looking forward? One of the things that's been intriguing to me over the last four to five years is that the vehicle manufacturers continue to push the envelope as far as technology and content. Where in the past they might have been content to take components that were bookshelf. They didn't wanna push the envelope as much. Are they continuing to push to higher premium type products, wheels, or are they backing down at all because of some of the pushback on the ATPs or is it still all systems go on their side? No. Actually, in Europe, we're continuing to see the push towards premium, and that's where it all started, actually. Yes. You know, when you think of the wheel business. Now they're accelerating the EV segments and you see some of our launches in the presentation in Europe. You know, with EVs, we are very well positioned. We think we can gain share. We are gaining share. The technology on those wheels tend to be significantly higher content. Light-weighted. Yeah. Light-weighted and premium at the same time. Yeah. I can't even imagine what they are, the content. Do you have the BMW iX? I didn't see that. Sorry? The BMW iX. Is that one of yours? Are we on BMW iX? I think we are. I think we are. I'll just check on that. Okay. All right. Well, thank you. Thank you very much. Thank you, Mike. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. It appears there's no further question. We are now passing the call to Majdi Aboulaban for closing comments. Thank you. Thanks again to all of you for joining us today. I'd like to also thank our Superior team for their hard work, in continuing to drive our business forward. We, we look forward to continuing to execute on our strategic priorities to deliver long-term growth. Have a great day, everyone. Thank you for joining today's call. You may now disconnect.