OK, we'll go ahead and kick it off here. Welcome to day two of Baird's Global Consumer Technology and Services Conference. I'm Luke Young. I cover vehicle technology and mobility for Baird. We're very pleased to have Gentherm with us here this morning to kick off the day. As you may know, Gentherm is the auto market leader in seat heaters, heated and cooled seats, steering wheel heaters, as well as a newer player in pneumatic comfort and massage. That was through a 2022 acquisition. The company is also looking to take all those products and push them into different applications as well, which we'll talk about today. Joining us, we have seated directly to my right, Jon Douyard, CFO, and Bill Presley, CEO of the company as well. Can also work in questions. You can send those to session4@rwbaird.com. To kick us off, Bill, if you want to have a few comments to start the day. Great. Thanks, Luke. I think you framed it up well. Just a couple of slides so that we're all aligned on who Gentherm is and what the possibility of Gentherm is. As Luke said, we are a global market leader in the thermal management and pneumatic comfort technologies. To put that in layman's terms and what it means is if you sit in a seat in your car and it has heated, cooled seats or pneumatic lumbar, chances are that's our technology. If you've ever been in a hospital and you're on a heated surgical pad or one of the blankets that controls temperature by blowing air through it, chances are that's our technology. We have a very strong product portfolio that's really built off of four core technology platforms. It's thermal management. It's air moving devices, which are a fancy name for fans. It's pneumatic solutions. It is valve systems. All of those go together to create the system solutions that we talk about when it comes to climate and controlled interior seats or medical solutions. Those technologies have broad market application. Today, we primarily sell through automotive and medical channels. Those have targeted markets in near adjacencies like commercial vehicles, agriculture, two-wheelers, as well as industrial applications and home goods. Our intention is to take that technology, to scale it, and to push it into these adjacent markets because we have proven that the technology is scalable. We have proven it in the vehicle. We have proven it between automotive and medical. Our commercial solution, our commercial approach is key for us. We sell directly to the original equipment manufacturers. That means we control our own commercial destiny. Our sales team is engaging with the OEs. Even though we might integrate through a tier one, we're in control of our own commercial destiny. We have great global reach, over 14,000 employees present in 13 different countries. Today, we engage with over 50 different original equipment manufacturers. That puts our products in over 1,500 different makes and models in 100 different countries. We have global scale. We're not a small player. As it's said, we are a market leader. Because of our global scale, because of our technology platforms, because of our commercial approach, we've aligned our strategic framework to ensure that we can scale the company profitably while expanding margins and driving total shareholder return. Our product line management has been aligned across the four core technologies that I've talked about. That is now giving our sales team the opportunity to look for opportunities to scale that core technologies into the other markets I mentioned earlier. Gentherm is a young company, 30 years old. We are in the early days of building out our operating system. One of the core monuments of that is we are building operational excellence through business process standardization. We have standardized in the past few months our factory floor KPIs. We are starting to build out our operating systems to ensure that we can benchmark ourselves against ourselves internally, figure out which of our sites and locations are doing things best in class, and which of our sites can learn from that. That is going to allow us to continually expand margin. The way we are building our operating system will allow us to reduce networking capital and improve the free cash flow. We're also focused on taking out fixed costs and optimizing our overhead structure and our variable cost structure with some of the footprint relocation activities and consolidations that we've talked about on our earnings calls. Overall, given our product portfolio, given our commercial model, given the application of our technology in broad markets, we fully intend to scale our technologies in other markets. We're an innovative leader, as I've said. We've already taken the steps and started building out the continuous improvement mindset that will expand our margins. Look, we have a very strong financial position. We're $1.5 billion today, 12.5% EBITDA, less than a half, like a half a turn levered. We have the opportunity to deploy our capital strategically and opportunistically to grow the business. In a nutshell, very confident in the technology, very confident in the ability to scale, very happy with the financial position of the company and the flexibility that provides us. We will scale this business. We will grow this business profitably. With that, I'll turn it back to Luke. Sounds good. Thanks for that, Bill. I want to start with a high-level question that I think is apt in that you're both new to the company as of January 1. I’d be interested in both of your perspectives here. Just what attracted you to Gentherm fundamentally? What does the company do well? What are the bones of the company that made this an interesting opportunity? Jon, do you want to go first? Yeah. I think Bill hit on a lot of it in the last slide here. I think a very uniquely positioned company in the space, maybe to add on to Luke's comments, both Bill and I started January 1st of this year. Uniquely positioned company in the space, certainly a market-leading position, fantastic financial profile with both margin as well as the balance sheet, as Bill talked about. As we look at the attractive pieces in terms of what the growth profile of the company is, as well as the opportunities to drive margin improvement, these are very tangible things that we can work together and execute on. Great opportunity to take this company to the next level and put your fingerprint on the internal operations of it as well. Yeah. Like I said, I knew the company. I've been in the industry almost 30 years, Chrysler, Lear Corporation, Aptiv, most recently left Aptiv as the Chief Operating Officer. I've been part of large companies with established systems, established history. Given the product, given the opportunity in Gentherm, I was just excited about the opportunity to come in and be part of writing the history of a company. Team is strong, technology is strong, application is strong. I was just very excited about the opportunity to drive some scale. Getting into the nuts and bolts, you referenced some of this in your introductory comments in terms of putting systems and standardization into place, taking what I think in the grand scheme of things, I'd agree, is a young company. Thirty years in the automotive market is relatively young. That's less than me, Luke. Yeah, less than me too. Within this, maybe if we could put a finer point on the fact that you are offering a pivot in strategy for the company overall. Maybe it would be helpful to compare and contrast for folks who've had familiarity with Gentherm in the past some of those key areas that you're pivoting and maybe leaning into a new direction incrementally. Yeah. I think Gentherm has gone through two phases. In the first phase, when it first started, there was talk about diversification. It was almost everything for everybody. There were a lot of bespoke, unique solutions. There was not really an opportunity to drive scale. In the second iteration, the previous CEO before me, Phil Eyler, I think he did a really nice job of saying, hey, we're going to focus in on some core technology platforms. The industry for us to do that is automotive because we can get quick scale. It's a good incubator for our technologies. He did a good job of doing that. When I came in, there was always discussion around the seat system, around the vehicle system, almost to the point where it felt like we were a seating company. We purposely took, instead of talking about climate-controlled seats, we purposely broke out the technology platforms into the four platforms I talked about, which gives us opportunity to actually read those individual solutions across to other markets. As an example, a valve is the heart of a pneumatic seat system. It is also a valve that is the heart of an industrial HVAC system that sits on top of this building. That is just an example of the scalability. Our intention in reauthoring the strategy, as Luke said, is not to be something for everybody, but to take the same plant, property, equipment, and technology we have today and scale that across various industries. That is why the product line management was realigned across the four platforms that I talked about. In just the very early days, we've broken down some walls between our medical business and automotive business, where they've looked at application of that core technology. They found things in the medical business that automotive uses today that can solve a problem that we see evolving in the medical business. I want to be very clear. Our strategy is not to be bespoke solutions, to be something for everyone everywhere. It is very specifically to scale the core technology, utilizing the same plant, property, and equipment into other markets. Jon. Yeah, I would just add that it is a pivot in terms of application of technology and applicability of technology elsewhere. It does not mean that we cannot grow in the auto business. We still have a lot of runway in that business. You saw on the first slide that last year we did $2.4 billion of awards. We are a $1.5 billion revenue company. Those things will align over time. We are confident in the growth path of the auto business. We are excited about the growth opportunities within the medical business as well, which is a small portion of the portfolio. We think we have got additive capability, leveraging the capacity across the business to really expand and be incremental. In maybe a more discreet sense, in your introductory remarks, Bill, you said that you're going to scale and grow the company profitably. If we zoom out and think of that in the shorter term to the medium term and kind of look at the 80/20, what are the key things that shareholders should expect you to deliver on to drive that value ultimately? I think a couple of things. I mean, we will have proof points this year from a growth perspective outside of the automotive industry. From a growth perspective, we'll see that. I think as we look at profitability, this company has been mid-teens EBITDA previously, where we delivered 12.5% last year. We see a path back to be that mid to high teens EBITDA company really through three things. One, leveraging the growth that we have from a company perspective. Two, we have a number of footprint transitions going on right now to eliminate fixed cost capacity across the company. We have some duplicate costs that we will eliminate here over the next 18 months. The third is we did buy an I.G. Bauerhin business in 2022, which got us into pneumatic and lumbar massage, which is below company average margins. The team's done a nice job positioning that to be more profitable. We expect that not to be a headwind for us going forward, but more of an opportunity to get it back to company average margins and above. We have three key focus areas from a profitability perspective. We are confident not just on the profitability side that we'll be able to do that, but also on the growth side as well. Yeah. I'd be curious, just in a real-time sense, you've had a long career in automotive, Bill, like you mentioned. Chrysler, Lear, coming over from Aptiv, have had knowledge and known about Gentherm. But actually getting under the hood, what would you say are some of the key incremental learnings in the first five months of being in the CEO chair, just about the bones of this company? I would say two things. One, I would say it's very much an innovative entrepreneurial company. I've been quite impressed with the speed at which the team's able to move to identify problems, solve problems. Number two, I come back to as a positive, it's a very young company. There's opportunity to put those operating systems in place, put those KPIs in place, and really drive some value by optimizing our cost structure, optimizing our efficiencies. There's fruit to be harvested there. The third thing is really the transferability of the technology. My initial impression of Gentherm was, hey, it centers around the automotive industry. It's automotive tech. As I got deeper into the product line and the product portfolio, I was actually very pleasantly surprised at the scalability and the adaptability into other markets of the technology. OK. Let's pivot into some of the stuff that you're doing right now. I guess I'd like to start with the opportunity to implement business process standardization. It's been referenced a few times here. Can we talk about first steps that you're taking right now? Just philosophically, this is something that I don't want to say it sounds easy, but there's a lot that goes into implementing it. Can we talk about maybe some of the things that you're able to get at in the near term versus things that maybe are in the out years? Yep. I'll give you a couple. The first one is Gentherm has had acquisitions. It's had divestitures. It's been built a little bit through acquisition of Alchmeyer, WET, other companies. The operating systems, even between locations, aren't the same. One of the first things that we did is we've established what we call the manufacturing operating system. That is so that our manufacturing locations are developing a production control plan exactly the same way in every location. The fundamental of that is plan for every part, which is we know how many days on hand of raw material and finished goods we should have for a specific part number. Production plans are being developed to manage networking capital. That's a kind of a fundamental change in the company. In the past, production plans centered more around customer schedules. Customer schedules fluctuate. Again, the focus was on discipline manufacturing operating system to minimize networking capital and balance the use of inventory. That was step one. Step two was very early on, we realigned the product line management, as I said. Originally, it was around product line management. We We talked about things like climate and comfort scale. That was a seat mindset. We specifically broke that out into the four technology platforms so that the commercial team could go out and hunt conquest wins with the technology in other markets. The third thing is, again, because of the acquisitions, program management gate reviews were a little different. That was a little bit problematic because we read platforms across from region to region. We had to make sure that program management was executing the same. They were talking the same language so that handoffs were seamless, clean, and efficient. Those are really the three areas that we honed in on very early in the first five months of the company. Yeah. As part of this, you also, I would say, inherited some things that were already in motion in terms of what the company had called fit-for-growth initiatives. I think it's fair to say some of those things are still in place right now, that it's maybe evolved and your approach is a little different. Can you talk about some of those fit-for-growth things that folks may be aware of that are still going on under the hood at the company? Yeah. Fit-for-growth was its own thing in Gentherm when Jon and I first showed up. What it was is it was really things like optimizing or taking cost out, optimizing overhead structure. Fit-for-growth has not gone away, but it has been ingrained into the culture and the daily cadence of the business. Instead of talking about saving money, say, for undirect labor, the question is, what should your direct labor efficiency be on the shop floor? What is your direct labor efficiency running at? What is your gap plan to close the gap through continuous improvement to get to where you should be running at to take the direct labor out to make sure that your variable cost structure is right? In the past, that would have all been managed by the fit-for-growth team. That fundamental activity is now managed by the daily production team. Now, that's just an example of direct labor efficiency becoming fit-for-growth. It is the same discussion in overall equipment effectiveness. How effectively are we utilizing our capacity? It is the same conversation with regard to OPEX. Instead of it being its own thing, we've ingrained it into the business with the people that touch it every day, aligned to very clear key performance indicators. Maybe if we could touch on the sales and R&D side of this. This is a company, as you mentioned, that has been through a couple phases in terms of its life cycle. As we're moving into this new phase, certainly Gentherm has been known as a company with a track record around innovation. How do you think about innovation relative to the future direction in the company and kind of what you inherited as well? I'll start. Innovation is our core. We'll stay focused on it. We have a saying inside of Gentherm is we're going to continue to innovate the products we have and the markets we have while we take the products we have and then push them into new markets. Innovation can never stop. We're going to innovate. I'm going to call it on two levels. One is we need constant innovation to remain competitive in the markets that we play. That innovation comes through new material sciences. It comes through new processes that allow us to make the product more cost competitive. That's extremely important in markets like China. We're also always looking for enhancements to the application. How can we take the system that we have and create the next best customer experience? Innovation is one of the key pillars in the product line management. It's our core. We'll stay focused on it. We don't intend to ever walk away from it. You want to add something? I think you hit it well. I would say you look at areas of the business where the company's done it well in the past. I mean, we launched or announced last year some sizable awards on pulsating massage. We call it Pulsea, which is sort of the next generation technology, one of a kind, incredible experience for the user. As you look at that lumbar and massage business, we've been able since acquisition, we've grown at 20% the last year. We expect that to continue as we move forward through innovation. That's a business that 2027 could be north of $300 million. It did $175 million last year. And so innovation really is the foundation for us as we look to grow here going forward. We're confident in growing in that automotive market because there are some significant opportunities and awards that we've already achieved that are in there on the foundation of innovation. What about the R&D investment that goes along with that? Is the level of investment appropriate right now? Do you think there's areas that can maybe be redirected and reinvested within the current spend? Yeah. I mean, we spend about 6% roughly on R&D as a percentage of sales. We don't view that we need to change that significantly. I think potentially refocusing some of the efforts on more hardware and targeted customer or where there is a proven customer use case or market. That is about the appropriate level we feel for the company at this point. What about just the portfolio broadly? I mean, should we be thinking there could be future product rationalization or just any cleanup around the portfolio right now? I think the company did a nice job of really rationalizing it and pruning what they said needed to be pruned. Last year, I think it was made public that the battery performance solutions that we were divesting from that. That is going to hit a steady state here in the next 12 months and run its course. The other one that the company pruned was really contract electronics manufacturing, which is not really a great business for us. We are not a contract manufacturer. We are an innovator. We are a product creator. Other than that, everything else has aligned around the four core platforms. I feel very, very good about the product positioning. OK. Let's talk about the current year, 2025. I want to kind of look across the key drivers within the automotive piece. Maybe if you could just talk about relative expectations or just the general line of sight that you have across some of the key technologies in terms of seat heat, in terms of the ventilation technology, and steering wheel heat as one of those applications as well. Yeah. I mean, so with regard to, I would say, heating technology, let's call it climate, because heated cooled seats, heated cooled steering wheels, sorry, heated steering wheels. Look, the adoption of that continues to grow. By 2030, our projection is climate-controlled seats will be in almost 70% of the vehicles worldwide. That is a continued growth path. As Jon said, the lumbar and massage, we see very strong adoption of that. We expect that business, as he said, to be over $300 million by 2027. The other thing is steering wheels. Heated steering wheels are a relatively low take rate today, I mean, less than 20%. We see that approaching 40% by the end of the decade. That is why Jon said we are very confident with regard to the product line growth in automotive. We see the tailwind coming there from the winds that we see, the winds that we've mapped out. I will just go back to all of that technology we believe is transferable in its core to the other markets. The first place you'll see proof points of that, in my view, is medical. We expect some announcements regarding medical before the end of the year, adopting that technology into medical. I think you'll see some words and some winds around near markets like commercial vehicle and agriculture, where the commercial team is out there now already working the channels. We're starting to see kind of a strong pull. Jon, anything else you'd like to add? No. OK. Pneumatic, maybe if we can double-click on that piece specifically. So like you said, growth very strong last year. Bookings have been a superstar in this business as well. Can you just help us conceive of where we are in that launch cycle? So this is a business that was acquired in 2022. There are organic bookings that you've pushed as a company since then. Just how much of that book of business are we seeing in the P&L right now and kind of the path to that $300 million number in 2027? Kind of what underpins that? I think it's still early stages. I think to Bill's point, both take rate in the industry is in its early phases. In terms of the award activity we've had over the last couple of years, we won't see that really trickle in here until 2026, 2027. Very early from that perspective, but excited about what that business can bring to us overall as we think about leveraging the scale across the company. How do you think about the China market? Certainly, if you're going to be in automotive, it is now easily the biggest market in the world. A lot of change in that market in the past five years. Just what are your ambitions in that market and maybe your guardrails as well? We're actually very excited about the China market. It's, as you said, the largest market. We know it's an opportunity for us. In the past, if you looked at our customer mix in the China market, we're about 80% global joint ventures, 20% China domestic OEMs. The team has made a very conscious effort, even before we got here, to start shifting that mix to a more market representative mix. By next year, we should be running about 60% global JV, 40% Chinese OEM. We intend to continue to change that mix to be more representative of the market mix in China. China is important to us for three reasons. One, biggest market, so obviously important. Number two, we gain a lot of competitive intelligence from the Chinese market. There are innovations that happen faster in China than anywhere else in the world. The market is very cost conscious. A lot of our best material engineering ideas, value engineering ideas, come out of the China market. The third thing is the Chinese OEMs have an edict to expand. They're going to push across the rest of the globe. They're going to look for partners that have a global footprint that can support them as they expand. We have that global footprint. We have the technology. We're building the relationships in China with Chinese OEMs. In terms of the company's positioning in China, China speed is one of the things that we hear a lot about as well. What does that mean in terms of Gentherm's view on the China market? Yeah. So I go back to that's why it's so important. China speed. If you look at the development cycle of a Western equipment manufacturer, it's sometimes 36 months up to 60 months. China is refreshing their product line every 12 to 18 months. We can have a concept for a technology. We can prove it out. We can bring it to a Chinese OEM. We can expect to start seeing revenue from those Chinese OEMs in 12- 18 months. We then take what we've learned from there, and we put it into our best practices. We look for opportunities to proliferate that globally. They move at double the speed of the rest of the world when it comes to product innovation and development. Yeah. Near term, a couple of minutes left here. The award environment, just kind of what you're seeing coming into the pipeline. Understand you're moving into newer areas. We'll look forward to seeing what that produces. In terms of automotive specifically, if you could just comment. Maybe also in terms of OEM purchasing behavior. You mentioned engaging directly with OEMs. Any changes in that front? No. I would say the purchasing environment and the program award environment has been pretty normal. I would say you think about the EV meltdown when programs were pushed off, programs were delayed, programs were canceled. We're not seeing that now. We have kind of hit what I would consider a very normal level of award activity with ebbs and flows. We track our conquests very closely. If you look at first quarter, we came in at $400 million, which is right about where we expect it to be. We expect another strong year. I would say the bulk of the bookings comes in the second half of the year based on what we see. We're not seeing any wild delays, any random cancellations. Purchasing behavior at the OEM has gone back to what I would consider the traditional business model, where they want to award. They want to talk volume. They want a long-term agreement with annual price reductions. That actually helps us in our business because we can then go back to our supply base and say with confidence, these are the awards. This is what we can offer you. What are the material savings that you're providing us? I would say we've gone very much, Luke, back to what I would consider a standard business model. OK. Got a last question, but I think we'll leave it just so we don't run out of time here. Please join me in thanking Bill and Jon for the presentation this morning.