Good morning, and welcome to the Stone Ridge, Inc. 3rd Quarter 2025 Results Conference Call. All participants will be in a 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 will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Kelly Harvey, Director of Investor Relations.

Please go ahead.

Good morning, everyone, and thank you for joining us to discuss our third quarter 2025 results. The release and accompanying presentation was filed with the SEC and is posted on our website at stonerich.com in the Investor section under Presentations and Events. Joining me on today's call are Jim Zizzleman, our President and Chief Executive Officer, and Matt Horvath, our Chief Financial Officer. During today's call, we will be referring to certain non-GAAP financial measures. Please see slide two of the presentation for a more detailed description of these non-GAAP measures and the appendix for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. In addition, Certain statements today may be forward-looking statements. Forward-looking statements include statements that are not historical in nature and include information concerning our future results or plans. Although we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subject to risks and uncertainties, and actual results may differ materially. Additional information about such factors and uncertainties that could cause actual results to differ may be found on page 3 of the presentation and in our Form 10-Q, which will be filed with the Securities and Exchange Commission under the heading Forward Looking Statement. After Jim and Matt have finished their formal remarks, we will then open up the call to questions. And with that, I will hand the call over to Jim.

Thanks, Kelly, and good morning, everyone. let me begin on page four. In the third quarter, we made good progress across all our key operational initiatives, resulting in expanded operating margin. In addition, we continued to build on our already strong backlog by announcing an incremental $185 million of program awards and expansions, including a new award for Mirai and several for control devices. Excluding non-operating foreign currency expenses of $2.4 million, adjusted EBITDA was $11.7 million, which represents a $3.6 million improvement over the prior quarter, driving an adjusted EBITDA margin of 5.6%, representing a 200 basis point improvement. We continue to focus on maximizing performance through manufacturing and operating efficiencies, improvements in material and quality-related costs, and prudent cost control aligned with current market dynamics. For example, our continued commitment to built-in quality and our proactive approach to addressing and resolving quality-related issues has driven a year-to-date quality-related cost improvement of approximately $5.3 million relative to the prior year. We expect to sustain and build on this momentum as our new products launch and ramp up over the next several years. During the quarter, we were able to outpace our weighted average underlying end markets by 110 basis points through continued strong Mirai sales as our European programs remain strong and our new North American launches continue to ramp up. Even with production volume headwinds across our major commercial vehicle markets, Mirai sales have increased by 78% year-to-date relative to last year. In Europe, we are seeing continued strong take rates as the system expands across several vehicle platforms and as customers equip Mirai as standard on certain truck models as we have previously announced. In North America, the feedback on our OEM system continues to be very favorable from both our OEM customers and the fleets. And as such, we are now expecting improved take rates relative to our prior expectations as the launches mature. As an example of the continued momentum we are seeing across the globe, later in the call, I will be providing more detail on yet another new business win for Mirai on a heavy-duty truck platform with an additional OEM customer. With this award, our system has been selected by this customer as the preferred solution amongst all competitors, paving the way for future global opportunities with this OEM. We are seeing growth across all our key products and are announcing several awards in control devices aligned with the evolving industry trends favoring more hybrid vehicle technologies. This includes our second leak detection module award for hybrid applications and several program extensions for our Park Clock actuator programs with Ford. Our focus on long-term growth enabled by advanced technologies and alignment with industry megatrends is driving new business awards and strong performance for our key technologies and products across all of our segments. And as a final point and as a follow-up to our announcement made on the last earnings call, the review of strategic alternatives for control devices is still in process. We will provide a further update on this process when it is appropriate to do so. Page 5 summarizes our key financial metrics for the third quarter of 2025 compared to the second quarter. In the third quarter, we outpaced our underlying weighted average end markets by approximately 110 basis points driven by Stormridge-specific growth drivers. Third quarter sales declined by 7.8% compared to the second quarter as ongoing macroeconomic pressures continued to weigh on our top-line performance. This sales decline was primarily driven by reduced customer production volumes in our key commercial vehicle end markets. According to the most recent third-party production forecasts, North American commercial vehicle production fell by approximately 21% quarter-to-quarter. Similarly, in Europe, commercial vehicle production declined by approximately 9%, reflecting both market conditions and normal seasonality in the third quarter. Stronger sales in the North American passenger vehicle end markets and increased sales in China helped to partially offset the headwinds faced. Driven by continued strong progression on key company initiatives, our core operational performance remained resilient against the external market headwinds we faced during the quarter. We continue to focus on material cost improvement actions, continuous improvement in manufacturing performance, and company-wide efforts on reducing quality-related costs. Our focus on built-in quality, responsiveness, and proactive processes to address quality issues has resulted in $5.3 million of improvement in quality-related costs year-to-date relative to last year. Similarly, material costs improved by 200 basis points in the quarter, and as a result, third quarter operating margin improved by 100 basis points despite an overall decline in revenue. The third quarter adjusted EBITDA of $9.3 million, or 4.4% of sales, represented a $4.7 million improvement, or a 240 basis point margin expansion relative to the prior quarter. Excluding the unfavorable impact of $2.4 million of non-operating foreign currency expense, third quarter adjusted EBITDA improved to $11.7 million, or 5.6% of sales, representing a $3.6 million improvement, or 200 basis point margin expansion relative to the prior quarter. And although we expect continued volatility in our end markets, we will continue to focus on the factors that we can control to drive both margin expansion and make progress across our key initiatives this quarter and build a stronger, more resilient foundation for future earnings growth. Turning to page six, Mirai continues to gain momentum, driven by increasing market acceptance and the ramp-up of recently launched programs in North America. At the same time, we are executing on new business opportunities with key strategic OEM customers as evidenced last quarter by our announcement of the largest ever business award in Stone Ridge history related to a Mirai extension. Building on that momentum this quarter, Stone Ridge has been awarded yet another Mirai OEM program with an additional truck manufacturer. This Mirai award represents another program that will contribute to our substantial growth with approximately $55 million of estimated lifetime revenue with an initial take rate assumption of 25 to 30 percent. We expect this program to launch in the first quarter of 2028. Furthermore, we expect that this award will open new doors for us around the world with this new OEM partner and expand Mirai's availability across their global platforms. Mirai sales continue to ramp up quite strongly, resulting in year-to-date Mirai revenue growth of 78 percent over the same period of 2024. Despite continued market pressures on production volumes, customer take rates in Europe continue to be strong as our system remains standard equipment on several heavy-duty truck models and is offered as an option on many others. In North America, our two recently launched OEM programs continue to ramp up, and feedback from our customers and the fleets remain extremely positive. So much so that we are already expecting higher take rates than originally planned as the programs continue to ramp. Additionally, as announced previously, the final prominent North American OEM began offering Mirai as an option on several heavy-duty truck models, making Mirai available with every single major North American OEM. Mirai and our strategy to create long-term growth for the platform is paying off with additional business awards and expansion across the global OEMs. We are deploying the resources necessary to optimize this growth platform and create long-term value for our shareholders. Now turning to page seven, I'm excited to announce several new business wins for control devices for our advanced technologies and products. As our customers continue to refine their vehicle propulsion strategies and control systems, we continue to refine our products and technologies to expand in tandem with our customers. We are excited to announce yet another award for our leak detection module on a hybrid vehicle platform with a Chinese vehicle manufacturer. As a recently introduced product technology, the LDM is a new technology designed to improve evaporative emission system performance in both hybrid and internal combustion engine-based vehicles. This award highlights the growing demand for this technology and positions control devices as a global supplier to new OEMs and new vehicle platforms across multiple geographies. With an anticipated start of production in the second quarter of 2026, this second award for our LDM product highlights control devices' continued opportunities amid the global hybrid vehicle expansion. Similarly, as a leading provider of high-performance actuation solutions, our reputation is built on rigorous quality standards and lasting partnerships with our customers. This led to several ParkLock Actuator Program extensions and expansions awarded by Ford this quarter, with a total lifetime value of approximately $130 million and peak annual revenue of approximately $38 million. dollars. Originally set to end in 2026, these programs now extend through 2031 and include both hybrid and electric vehicle programs such as Ford's Maverick, Transit, Kuga, Mach-E, and F-150 Lightning. We are proud to support Ford as they invest in platforms that will drive future growth. Control Devices continues to focus on bringing system-based solutions and innovative technologies to each of our end markets and customer applications. With a focus on drivetrain agnostic technologies, we remain well-positioned to drive new business awards as the market continues to evolve. With that, I'll turn it over to Matt for additional detail on our financial performance in this quarter and a discussion on the expectations for the remainder of the year.

Thanks, Jim. Turning to page nine, sales in the third quarter were $210 million. which were lower than our previous expectations as macroeconomic pressures persisted, negatively impacting top-line performance. Sales underperformance was primarily driven by lower customer production volumes in the commercial vehicle end markets, most notably in North America, where heavy truck OEMs continued to announce cuts to their 2025 outlook. This decline was partially offset by incremental demand in control devices. Third quarter adjusted operating income was $2.4 million, resulting in a 100 basis point improvement in adjusted operating margin relative to the second quarter of this year. Third quarter adjusted EBITDA was $9.3 million, or 4.4% of sales. Excluding non-operating, non-cash, foreign currency expense of $2.4 million related to intercompany balances, our third quarter adjusted EBITDA was $11.7 million, or 5.6% of sales. Operating performance benefited from improved material costs and reduced operating costs, partially offset by the impact of lower sales volume. Similarly, we have continued to focus on reducing quality-related costs, resulting in a $5.3 million reduction year-to-date relative to the same period last year. We continue to focus on improving the fundamental performance of the business. We are confident that these actions will drive earnings expansion as we continue to launch new programs and expand on our existing products and technologies. Page 10 summarizes our key financial metrics specific to control devices. Control devices' third quarter sales of $72.5 million increased by 1.9% relative to the second quarter, primarily due to higher sales in the North American passenger vehicle end market, partially offset by lower passenger vehicle sales in China. Third quarter adjusted operating income was $1.5 million, or 2.1% of sales, a 190 basis point decline relative to the second quarter. This decline was primarily due to higher overhead costs, including incremental costs related to tariffs. Although we have mitigated the overwhelming majority of incremental costs related to tariffs, we are still sharing a small percentage with our customers, primarily due to strategic customer agreements. These factors were partially offset by lower operating spend and favorable direct material costs. Although the North American passenger vehicle market has somewhat improved, there is the potential for production volume volatility in the fourth quarter as uncertainty remains related to tariff policies and the corresponding potential impact on demand. Additionally, supply chain constraints, including the recent fire and aluminum supplier in North America, as well as potential electronic component disruptions related to Nexperia, have impacted and may continue to impact several of our customers' production. We will continue to monitor the potential impacts of supply chain challenges and global trade policies to ensure we can react efficiently and effectively to any changes in the macroeconomic environment. We will continue to focus on the things we can control, including advanced and new product development, commercial expansion, and improvement in material costs and manufacturing performance to drive margin expansion going forward. Page 11 summarizes our key financial metrics specific to electronics. Third-quarter sales of $128 million were impacted by continued production volume reductions in our key commercial vehicle end markets. As Jim mentioned earlier on the call, North American commercial vehicle production fell by approximately 21% quarter-to-quarter, whereas European commercial vehicle production declined by approximately 9%, reflecting both market conditions and normal third-quarter seasonality due to planned summer shutdowns. Third quarter adjusted operating margin of 5.3% expanded by approximately 250 basis points relative to the second quarter, primarily driven by favorable material costs, improved quality-related costs of almost $1 million, and reduced operating costs. We expect continued downward pressure in the commercial vehicle end markets for the remainder of the year. As we've discussed previously, we expect that Mirror Eye revenue growth will continue to partially offset these market declines through the ramp-up of recently launched OEM programs, increasing take rates, and continued expansion in our aftermarket applications. Electronics remains well-positioned to weather macroeconomic headwinds while improving operating performance in anticipation of significant future growth based on our strong backlog of awarded programs. Page 12 summarizes our key financial metrics specific to Stone Ridge Brazil. Stone Ridge Brazil's third quarter sales totaled $18.9 million, which represents an increase of $3.6 million, or 23.5% growth relative to the second quarter. This increase was driven by higher local OEM sales, which expanded by approximately 22% relative to the second quarter. Third quarter operating profit improved by $1.7 million, or 790 basis points relative to the second quarter, primarily driven by the impact of higher sales. We expect stable revenue and margins in 2025 as we continue to expand our portfolio in Brazil to align with our global growth initiatives and further expand our local OEM programs. Furthermore, Brazil remains a critical engineering center, which we will continue to utilize and grow to cost-effectively support our global business. Turning to slide 13, we are updating our full-year revenue guidance to reflect lower production volume expectations, primarily in the North American and European commercial vehicle end markets. Third-party production volume forecasts and our own customer communications and data reflect the ongoing impacts of a volatile trade environment and reduce truck demand. Many of our key customers have cited weakened demand, coupled with market and tariff uncertainty, as they've reduced Class 8 vehicle production expectations for the remainder of the year. More specifically, IHS is now forecasting an incremental 5.3% decline in production for our weighted average end markets, which would translate to a $46 million headwind. That said, we expect that Mirai and other Stone Ridge-specific growth drivers will offset some of the macroeconomic headwinds that we face. As such, we are offsetting the majority of the forecasted production decline and guiding to the low end of the previously provided full-year revenue range of $860 to $870 million, which represents a midpoint reduction of only $10 million, or approximately 1.1%. As it relates to adjusted EBITDA, we are updating our guidance range to $30 to $32 million, which represents a midpoint reduction of $5 million. This adjustment reflects the $2.4 million of non-operating foreign currency expense that we incurred in the third quarter, as we've previously discussed, as well as approximately $3 million driven by contribution margin on lower expected revenue. We will continue to improve the fundamental performance of the business and focus on the variables within our control. Most importantly, we are continuing to build a foundation for strong incremental earnings as we continue to grow and continue to outperform the market. Turning to page 14, we have continued to focus on cash performance and a strong balance sheet through strong operating performance, inventory reduction, and prudent capital spending. In the last 12 months, we have reduced our inventory balance by $31 million, while year-to-date adjusted free cash flow has improved by $4.3 million, or approximately 36% relative to last year. We will continue to focus on improving working capital and efficient capital spending to optimize our cash performance as we continue to grow. As it relates to our current credit facility, our maturity date is now within one year of our third quarter filing date. Due to the ongoing strategic review process related to control devices, we are waiting to refinance our credit facility to ensure we align the capital structure with the overall long-term structure of the company. Additionally, we are incurring incremental costs with third-party advisors as we evaluate strategic alternatives, which are not all adjustable per the terms of our existing credit facility. We have amended our existing credit facility to extend our interest coverage ratio relief by maintaining the same ratio as this quarter, or 2.5 times, through the first quarter of next year. Should we sell control devices, the proceeds would be used to reduce debt and significantly improve our overall leverage ratios. Should we complete our review without a sale of the segment, we would expect to refinance the credit facility by the time we file our fourth quarter results early next year. As such, we expect to remain in compliance with all of our covenant ratios. Either through a sale of control devices or a refinancing of our existing credit facility, we expect to continue to have the capital and liquidity necessary to continue to invest in the business, drive growth, and expand earnings going forward. With that, I will hand the call back over to Jim for his closing remarks. Thanks, Matt.

Turning to page 15, in summary, our third quarter performance highlights our continued progress across our key initiatives. As evidenced by the progress made so far this year, this team is laser-focused on executing on our key priorities to drive strong growth, continued margin expansion, and an improved balance sheet. We will continue to focus on overall operating cost improvement and operational execution to drive strong contribution margin and focus on inventory reduction to improve our cash position and reduce our leverage profile. We will continue to focus on addressing the things that we can control and reacting efficiently and effectively to conditions that are not in our direct control. We remain focused on building a strong foundation for continued earnings expansion as we capitalize on our impressive portfolio of advanced technologies. This is highlighted this quarter by additional business award announcements totaling at least $185 million in lifetime revenue, including a Mirai award with a new customer, a second leak detection module program, and a significant extension and expansion of our existing ParkLock actuator programs. Stormridge remains well positioned to continue to outperform our underlying end markets and drive margin expansion, resulting in long-term customer value creation. Together, we are shaping a stronger, more focused, and more successful Stone Ridge.

And with that, I'll open the call to questions.

We will now begin the question and answer session. To ask a question, you may press star, then number one, on your Touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, press star one again. We'll pause momentarily to assemble our roster. There are currently no questions. I'll turn the call back to Jim for any closing remarks.

Well, thank you, everyone, for joining us for the call. I know your time is very important, and as always, we truly appreciate your willingness to engage us. We are operating with an unrelenting focus on our key priorities, driving significant earnings expansions as we grow, and today's announcements regarding additional business bookings exemplify the clear effectiveness of our approach. We will continue to deliver on our commitments by focusing on quality improvements and material and manufacturing cost reductions, all while maintaining a clear focus on market dynamics and any necessary mitigating actions. In addition, we are laser-focused on our long-term strategy, driving increased shareholder value. And in support of that, we are continuing our review of strategic alternatives for our control devices business. We expect that our performance, along with our unique mix of industry-changing product platforms, as well as our consideration of strategic alternatives for controlled devices will continue to drive strong shareholder value. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.