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Operator: Welcome, ladies and gentlemen, and thank you for standing by. NN, Inc. First Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. I will now hand today’s call over to Joseph Kameniti in Investor Relations. Please go ahead, sir. Thank you, Tamika.

Joseph Kameniti: Good morning, everyone, and thank you for joining us. I am Joseph Kameniti with NN, Inc.’s Investor Relations team, and I would like to thank you for attending today’s earnings call and business update. Last evening, we issued a press release announcing our financial results for the first quarter ended 03/31/2026. A supplemental presentation has been posted to the Investor Relations section of our website. If anyone needs a copy of the press release or supplemental presentation, you may contact Alpha IR Group at nner@alpha-ir.com. Joining us from NN, Inc. management today are Harold C. Bevis, President and Chief Executive Officer, and Christopher H. Bohnert, Senior Vice President and Chief Financial Officer, while Timothy M.

French, our Senior Vice President and Chief Operating Officer, will be joining us for the question and answer session. Please turn to Slide 2, where you will find our forward-looking statements and disclosure information. I would like to note the cautionary language regarding forward-looking statements contained in today’s press release, supplemental presentation, and the risk factors section of the company’s quarterly report on Form 10-Q for the fiscal first quarter ended 03/31/2026. The same language applies to the comments made on today’s conference call, including the Q&A session, as well as the live webcast. Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, foreign exchange rates, tax rates, acquisitions and divestitures, synergies, cash and cost savings, future operating results, performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, including the potential impact and ramifications of tariffs, the impacts of pandemics and other public health crises, and military conflicts on the company’s financial condition, and other topics.

These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control, which may cause actual results to be materially different from such forward-looking statements. The presentation also includes certain non-GAAP measures as defined by SEC rules. A reconciliation of such non-GAAP measures is contained in the tables in the financial section—I’m sorry, in the final section—of the press release and the supplemental presentation. Please turn to Slide 4, and I will now turn the call over to our CEO, Harold C. Bevis. Harold?

Harold C. Bevis: Thank you, Joe. Joe, I just received a text that there is just music on the call. Can we do a check to make sure the lines are open? Can you help us with that?

Operator: Yes. The lines are open.

Harold C. Bevis: Okay. I will proceed here. Thank you. Thank you, Joe. Good morning, everyone. We had a good quarter and we have a good outlook. We look forward to giving you an update today and answering questions. We had a strong Q1 and we are very thankful for it, across net sales, adjusted EBITDA, and a few other areas. We are going to highlight a few of those today. The performance in the quarter was led by a very good mix, which was a main driver of our improved results. Of note, we achieved the highest trailing twelve-month adjusted EBITDA that we have had in five years. Additionally, with regard to future performance, we captured noteworthy wins in key markets of electric grid and data center, and we are going to touch on those in a minute also.

Second point: our growth programs are delivering results. We have three main diversification programs in play—electrical grid and data center, defense electronics, and the medical markets. We expect to see solid volume growth through 2026, and we are winning in data centers for AI cloud-computing hardware. We are focused on increasing our content per data center. Third, our growth program is meeting up with our cost blueprint and generating good profits. We have a lower-cost operating footprint today; it is delivering results reflected in stronger profitability. Our margins, therefore, are trending to the high side of historical results, and you are witnessing the earnings potential of this company. Fourth, we are forecasting this performance to continue, and we are raising our 2026 guidance in a few spots.

Our strong Q1 and the outlook and the visibility we have to the remainder of the year are leading us to positively revise our full-year guide. We are revising our guidance ranges higher for net sales, adjusted EBITDA, and new business wins, which we previously announced on April 14. We are building momentum from new launches and program ramp-ups, and we are quite excited about it. Our improved 2026 outlook is pulling the timelines of attaining our long-term goals in as well, and specifically, we are accelerating our five-year model to be a four-year model. If we turn to Slide 5, I would like to make a few more comments about the outlook and the guidance improvement. We did have a strong first quarter—we are going to cover that—and Christopher is going to do a deep dive into some of the areas.

We delivered on multiple company records, and we are building forward momentum that will carry us through the rest of the year and into 2027 as well. First, our sales growth is broad. It is not one big program with one customer or just a few customers. Instead, our sales are up with 22 of our top 30 customers, and improvements are widespread. We have 700 customers in total, and the group beneath the top 30 customers was up as well. Right now, we are launching over 100 small and medium-sized programs with many of those customers, and we are adding brand new customers also, specifically in the data center arena. So our outlook for the rest of 2026 is strong and multifaceted. Second, based on our full-year outlooks, forecasts, and actual momentum, we are going to deliver record annual performance this year.

We expect that strength to be across many of our key metrics. We expect strong sales mix growth, growth in adjusted EBITDA, growth in adjusted EBITDA margins, growth in adjusted EPS, and growth in new business wins. We are expanding our participation in the data center build-out that is underway, and we are actively prospecting and winning additional business. It is a nice turning point for our company, and we expect it to continue. Additionally, as a result of a strong 2026, we are moving the long-term goal timeline in from 2030 to 2029. The results that we are delivering are overcoming global automotive weakness and global commercial vehicle weakness and tariff turmoil. We are more than offsetting those dynamics and successfully replacing these soft areas with new sales in electric grid, data center, defense electronics, medical, and our industrial business.

Turning to Slide 6, we want to review the high-level metrics in the first quarter, and then Christopher H. Bohnert, our CFO, will drill down further into the numbers. First, our sales were up both year-over-year and sequentially by about $12 million to $13 million, or about 12%. The growth was a solid mix, and it was in grid and data center, defense, and electronics—delivering strong growth as I mentioned. The sequential sales growth also led to a commensurate increase in working capital, which occurs seasonally in our business, and that did happen in the first quarter. Second, our adjusted operating income was up year-over-year and sequentially, and the results of our operational actions are shining through. We have a leaner operating model today, and the large one-time costs that we incurred are washing behind us.

Our adjusted EBITDA was also up year-over-year and sequentially, driven by a good sales mix, which we expect to continue, heavily concentrated in the power side of our business, and strong operating performance. Most of our plants are delivering results for us. We have just a few left that are at breakeven or slightly negative, but it is very widespread across many customers and all of our plants, and we are very thankful that we are seeing the results of our hard work. On the new business front, we were up significantly year-over-year and sequentially. We had a big quarter in Q1, concentrated in electrical grid and the data center markets. On adjusted gross margin, we were up sequentially and year-over-year, for the same reasons—good sales mix and good operating performance.

It was a solid quarter, reflective of the progress we have made across the portfolio, with a good sales mix and strong operating performance. As a result of this performance and our outlook, we are raising our outlook for both the full year and for the next two years. We will get into a few more details after Christopher reviews our first quarter more fully. Chris?

Christopher H. Bohnert: Thank you, Harold. Good morning, everyone. If you are following along in the presentation, I will start on Slide 7, which highlights our first quarter financial results. Net sales for the quarter were $118.5 million, an increase of $12.8 million, or 12.1%, versus the prior-year quarter. Revenue growth was driven by the impact of a positive shift in our sales mix, as Harold mentioned, higher precious metals pass-through in the quarter, along with favorable foreign exchange impacts. These positive impacts were partially offset by softness in our China automotive business. Outside of China, our global automotive business was up slightly. Adjusted operating income for the first quarter was $5.8 million, marking a strong increase of $3.8 million compared to $2.0 million—up 184% versus the prior-year period.

Adjusted EBITDA results for the quarter were $14.1 million, increasing $3.5 million compared to the $10.6 million reported in the prior-year period, an improvement of 33.7%. Our strong first quarter adjusted EBITDA results were driven by an improvement to our sales mix, the capture of operating efficiencies across our operations, and our successful cost-out programs implemented over the past couple of years. As a result, adjusted EBITDA margins were 11.9%, an increase of 33% compared to the 10% in the prior-year quarter. I will turn to our segment results starting on Slide 8. In our Power Solutions segment, where our business consists largely of stamped products, net sales for the quarter were $55.4 million, up $11.9 million, or 27%, compared to the $43.5 million reported in the prior-year period.

The growth was driven by an improved sales mix from higher volumes in targeted growth areas, higher precious metals pass-through pricing, and favorable foreign exchange impacts. This top-line growth was partially offset by sales volume softness in certain stamped product lines. Power Solutions adjusted EBITDA was $10.4 million, an increase of $4.1 million, or 65.1%, versus the prior-year quarter of $6.3 million, driven by improved sales mix and strengthening profitability through ongoing cost-out initiatives. We do see a short lag as we pass through the impact of inflation to precious metals pricing, tariff impacts, and other surcharges, which temporarily pinch profitability. As a function of this improved adjusted EBITDA, we have seen stronger margin pull-through, with quarterly adjusted EBITDA margins of 18.7% of net sales, up from 14.5% in the prior-year period.

Looking ahead, our new business momentum in this segment remains strong, with wins totaling $29.3 million in the first quarter, concentrated in the key markets that Harold mentioned—electrical grid, data center, and defense and electronics products. During the quarter, we announced that we had acquired additional plating equipment to advance our growth in electrical grid and data center markets. Consistent with our strategic growth efforts, we continue to invest our CapEx to support these growth opportunities. Now turning to Slide 9, our Mobile Solutions segment, which covers our machined products business: net sales for the first quarter were $63.1 million compared to $62.2 million in last year’s first quarter, an increase of $0.9 million, or about 1.4%.

Notably, this segment has now returned to year-over-year sales growth. While modest, our sales growth reflected solid volumes from new program launches and broader strength across North America, South America, Europe, and automotive markets, along with favorable foreign exchange impacts. This was partially offset by softer automotive volumes in China. Our first quarter adjusted EBITDA in the Mobile Solutions segment was $8.2 million, up slightly versus last year’s first quarter, with adjusted EBITDA margins holding at 13%. The flat margin reflects the offset of profitability improvements in most regions against the impact of China automotive softness. On the new business front, we secured wins totaling $13.6 million, notably including liquid cooling connector components.

We are now in production and pursuing additional opportunities. With that, I will turn the call back over to Harold.

Harold C. Bevis: Thank you, Chris. Let us turn to Slide 10. Our portfolio transformation is working. We are executing on our strategy to intentionally reshape our portfolio toward higher growth and higher margin end markets. Our top three growth markets are electric grid and data center, defense electronics, and medical. Those specific end markets are collectively up 28% versus Q1 2025. On a consolidated basis, our growth markets accounted for 35% in 2023 and now constitute 44%, so the 56% in automotive has shrunk to 44%. We are deliberately changing that mix, and we have four goals to continue that progression. Our growth is broad-based and spread across multiple customers, products, and programs. It is not concentrated in any single program or with any single customer or platform.

There are no big bets in what we are doing—intentionally. Our auto strategy remains disciplined. Our goal in automotive markets is to maintain good volumes, not chase share or large volumes. Because of this, we are better able to absorb the automotive market weakness that is happening without disrupting our overall growth trajectory or our reported numbers. This mix shift is an important structural driver of our margin expansion. The growth markets carry more accretive margins than our legacy mix, helping us achieve our margin rates. As these scale up, we expect to see continued pull-through to gross margin and EBITDA. This will be a primary lever closing the gap to our long-term targets. Turning to Slide 11, I want to point out a little bit more about each of the three areas we are pursuing for diversification and forward growth, and each has the potential to become a material business for our company.

All three are internally funded, and we have been allocating people and capital resources to each one. Each has dedicated assets, certifications, and pipelines well in excess of current revenue. Starting with electric grid and data center: we are building on a large, profitable NN, Inc. business. It is already over $70 million on an LTM basis, and our near-term goal is to target this to be a $100 million business. We have added assets, products, and people, and as we previously reported, we added liquid cooling connectors in the first quarter with a new product line and new customers. The data center part of this endeavor for us is fast-paced and collaborative. As you know from following the public markets, there is a big backlog of equipment and infrastructure build-out underway globally, and the supply industry, of which we are a part, is working to get caught up.

Bottom line: growth from new and existing customers is higher and faster than we expected, and it is continuing. We are attempting to increase our content per rack and content per data center with multiple endeavors underway. Margins are quite good. Next is Defense Electronics. We are also adding to a large, profitable business already over $50 million on a trailing twelve-month basis. We are adding assets and certifications here as well and internally funding this. We have been working with a marquee OEM in the United States to expand into a new product area as a tier-one manufacturer of weapons components. It has been going quite well. We have had to add new specialized equipment because the parts are quite large compared to parts we have made in the past.

Bottom line: growth has been faster and bigger than we expected, and momentum continues to build. The third area is medical. We restarted that in 2023. It was a small, unprofitable business, and we implemented both an operational turnaround plan as well as a forward growth plan. Similar to Defense Electronics, we have been working for two years with a marquee OEM, a global maker of robotic surgical equipment, and that program is beginning to show results for us with products going into production. Bottom line: it has been slower than we expected relative to the other two diversification endeavors, but momentum is now increasing. We are carrying forward with each of these, with prospecting lists, new products envisioned, new equipment, and new certifications.

The biggest and fastest one obviously is data center. If you turn the page to Slide 12, we are getting a lot of questions about what we are doing and the size of the market. It is our number two overall market right now. Our internal plan is for it to become our number one market; currently, the global automotive business is larger. We sell multiple components into this arena—transformer components, electrical disconnects, circuit breaker components, smart meter components, and liquid cooling components. It is already a big, accretive business for us, and our near-term goal is to get it to $100 million. The liquid cooling connector business that we launched in the first quarter is a meaningful product for us. The market calls them quick-disconnect couplings or fluid connectors—the stainless steel connectors through which the coolant flows to the cold plates and cooling system inside the data center racks so chips do not overheat and can perform to spec.

Market size estimates for what we are participating in range from $1.5 billion to $6 billion and are growing quickly—some growth rates are at 40% per annum. The bellwether reporter here is NVIDIA; they say they have a five-year backlog. We are seeing big backlogs as well, going out through the rest of this decade, and we are participating. We are leveraging our fluid management trade secrets. For a long time, we have understood how to control fuels—atomized fuels inside engines. It is a no-leak situation as well. While we had over 100 machines that could make these products already, we added another 17, have ordered them, and received about half. We are coupling them with our in-house trade secrets around turning, treating, electroplating, abrasive flow machining, and manufacturing and testing.

You cannot have burrs; there is a lot of deburring required, and they must be aesthetically pleasing with a mirror-like finish, which leads to electroplating. We believe there is a lot of upside in this area. We have a multiproduct view and a goal to add content per rack; we are working that on a go-forward basis. Turning to our end market outlooks, we participate in several end markets. We have two main types of production platforms—one turning and machining, and one stamping, welding, and plating—and we serve multiple end markets with those common engineering and manufacturing platforms. Grid is strong, growing, and backlogged several years; generally, we are getting into situations that are immediate ramp-ups, and we expect that to continue through the rest of this year.

In defense electronics, we mainly serve North America, specifically the United States. Spending is at record levels under the current administration and on a forward basis, and we expect that to continue through the rest of this year. In medical, we are focused on equipment versus implants. It is a steady and growing market, and we expect to achieve more new wins as the year progresses. It is still a small business for us, but Timothy M. French and team have corrected the profit problem, and we are making money in the medical business already. Automotive in China has been growing quickly for us over the last couple of years. If you follow that market year-to-date in 2026, the China market is down and is predicted to be down for the rest of the year.

We expect to stay at a similar rate through the rest of 2026. Indigenous market is down more than export market, but we are in the suburbs of Shanghai serving Chinese carmakers, and the business is soft. We have been able to overcome that softness with our mix. Commercial vehicle covers trucks, agricultural equipment, and construction equipment. Each of those markets has a different outlook by geography. We are mainly attached to large diesel engines. The market has been down slightly globally—a combination of down in North America but up in China. The bellwether there is Cummins—big diesel engines and now generators for data centers—and we are expecting growth in the second half. Industrial—mainly tied to the U.S.—with GDP up about 2% year-to-date; we expect modest growth through the rest of the year.

Global Auto is slightly down due to affordability, ICE/EV transition reset rates, and China exports; global data out yesterday predicts the global market will be down about 2% this year. Due to the programs we are on, we will do a little better than that, but we are definitely flat to slightly flat the rest of 2026. Overall, our markets are better than last year. If we turn to Slide 14, I would like Chris to take us through a little bit on our long-term goals.

Christopher H. Bohnert: Thank you, Harold. Please turn to Slide 14. Given our expected market growth rates and the pace at which our targeted growth programs and cost initiatives have been delivering results, we are pulling in the timing of our long-term financial goals by one year. We have previously communicated these goals to you. With these changes in our markets and business, we are pulling them forward from 2030 to 2029. The net sales and EBITDA targets are not changing. Net sales of approximately $600 million at a 20% adjusted gross margin rate and adjusted EBITDA of about $80 million at a 13% margin are consistent with what we have previously reported. Relative to our full year 2025 results, this reflects more than 40% growth in net sales and more than 60% growth in adjusted EBITDA, with adjusted gross margins expanding from around 18.5% in 2025 to our target of 20%.

As previously communicated, we are targeting about 13% to 14% adjusted EBITDA margins, demonstrating meaningful growth from where we were at about 11.6% through 2025. Slide 15 provides additional context on our business performance through our transformation actions and the trajectory underpinning our targets. This chart represents our adjusted EBITDA performance from 2020 through the midpoint of our 2026 updated guidance, excluding the contribution from the divested Lubbock business for comparability. Notably, ahead of the launch of our transformation, our results reached a trough in mid-2023—approximately $35 million on an LTM basis—with adjusted EBITDA margins having fallen to 7.4%. From the launch of our transformation plan, adjusted EBITDA has increased approximately 61% to the midpoint of our 2026 guidance of $57 million, with margins expanding significantly to 12.4%.

This success in the first years of our transformation has been led by operational performance as we simultaneously reestablished our sales pipeline and reshaped our portfolio mix. Our growth programs in electric grid and data center, defense electronics, and medical are now contributing and we expect to drive further improved results. Lastly, on Slide 16, which shows our end market outlook for 2026 as it stands today: given our first quarter results and the expected forecast we have for the remainder of the year, we are revising our guidance ranges slightly higher. For the full year 2026, we are now guiding net sales in the range of $450 million to $470 million, reflecting approximately 9% growth at the midpoint compared to the prior year, and adjusted EBITDA in the range of $52 million to $62 million, reflecting approximately 16% growth at the midpoint.

Importantly, this revised guidance is supported by our current market outlooks, the expected contributions from our new business from prior wins, and the operating leverage we expect to capture as our volumes grow across the year. With that, I will now turn the call back over to the operator for questions from our analysts. Operator?

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Operator: And if you do have further questions, you may reenter the queue. First question is from the line of Rob Brown with Lake Street Capital Markets.

Rob Brown: Congratulations on the progress. Thank you. Good morning. Just following up on your data center activity and wins there. To get to the $100 million goal, what are the steps you need to take? It seems like you are well on the way there. Is it expanding penetration in the liquid cooling market, or are there other products that you can go after to get there?

Harold C. Bevis: Yep. We have multiple items there, Rob. We have two new products we are coming out with for busbar and power whips. We are also growing with the current content that we have there, which is tied into transformer components as well as these connector components. So we are not overly counting on one product line. We are hitting the market more broadly now and have organized to do that. We are not making any predictions yet, but we have a great product line going into these data centers, and we are trying to get our content up. We are not falling in love with any particular product. We are selling a product basket.

Rob Brown: Okay. Great. And then on the capacity to expand there, I know you have mentioned additional machines that you are deploying, but how much capacity do you have in the Power Solutions segment that you can grow into before you really need to add much capacity?

Harold C. Bevis: Yeah. Tim, do you want to take that?

Timothy M. French: Sure. In Power Solutions specifically, we have significant capacity available. We are not running 24/7 in the primary facilities, so we are able to adapt and assimilate new business fairly quickly. It requires basically just the creation of the tool, and then we are good to go from there. So lots of available capacity. Ramp-ups can be extremely quick on the power side.

Rob Brown: Okay. Excellent. Thank you. I will turn it over.

Harold C. Bevis: Thank you, Rob.

Operator: Your next question is from the line of Analyst with Noble Capital Markets.

Analyst: Good morning. Thanks for taking my questions. You mentioned a couple of factors that were behind the sales growth for the quarter, including precious metals pass-through, some favorable FX, and product mix. Could you break those out as to what each contributed to that 12% sales growth?

Harold C. Bevis: It is harder to answer than that because we are up with 22 of our 30 top customers, and they cover basically all the markets we are in. We are flat with three others and down in a couple areas. It has been a consequence of the new programs that we have won and are launching. Chris touched on that—we have all these new programs that we have won with new and existing customers, and that is helping propel us. Precious metals were flat sequentially but up year-over-year. We are expecting precious metal pricing for the rest of the year to be flat to where it is now, so it will not contribute anything further beyond the second quarter because current levels are flat to the second half. If you look at the second half of last year, when things began to come up, we are getting a temporary boost for sure from precious metals and volume growth with customers in most of the markets we are in.

Analyst: Okay. Thanks for that. And then just a follow-up on the data centers. When you talk about increasing content per rack, what are we talking about here? I do not know if you can give a dollar figure or percentage type of increase. Whatever the number is that you are selling into the rack today, could you double the amount of content you are selling into that rack, triple it? Just a little more color to see the potential growth by increasing wallet share per rack?

Harold C. Bevis: That is similar to what Rob asked. Roughly speaking, our trailing twelve months is a little over $70 million, and we are trying to get to $100 million, and our pipeline is multiples of that number. It is hard to tell which new programs you will get a hit on, but we are planning on our same hit rate, and I believe that we have the pipeline that we need to get to $100 million. The TAM is so big here, Joe—we are talking billions of dollars of TAM—and we have a $70 million business. We cannot blame anything on the market; it is based on our own actions. We are coordinating our efforts to grow. When we get specific numbers, it is hard to tell how many racks are in development right now with the amount of announcements underway.

We cannot answer that with accuracy right now, but we will get smarter and report more in the future on per-rack content. When we say per rack, when we are calling on a customer that is building out racks, we are trying to get more content during that sales call, and we have multiple products we can bring. We are coordinating between what we call Power and Mobile to call on these customers to sell a bigger portfolio of products.

Analyst: Okay. Great. Thanks for that, Harold. I will get back in queue.

Harold C. Bevis: Thank you.

Operator: Your next question is from the line of John Edward Franzreb with Sidoti & Company.

John Edward Franzreb: Good morning, everyone, and thanks for taking the questions. I would like to drill down a little bit on some of your newer growth initiatives. Can you talk a little bit about what is going on in medical? You suggested that it is a little bit behind plan. Also, the new program—I am interested in the wire harness program initiated last year. How is that standing?

Harold C. Bevis: Medical pipeline is fine. The development is fine. We have had to conquer more plant certifications than we expected at the beginning of our endeavors, but we have now done that, and we expect to report positively in the medical arena this year. Coming into today’s call, it was not a source of our sales increase, so it has not showed up yet in terms of actual revenue. We are not backing off it. We have a dedicated team, we hired people, we added equipment, we completed certifications, and we are calling on customers and adding to the portfolio. In terms of the three initiatives, it is behind, but overall what we expected from the three in total is ahead by a lot. It is hard to tell where you are going to get the hit. It is playing out nicely overall.

Timothy M. French: On wire harness, we put together the team and hired a team. Harold and I are in the final stages of equipment selection. There is a wire harness show—today, actually—and we have a team there. We are making specific equipment selections and expect to report during this year that we have launched that program.

John Edward Franzreb: Got it. And on precious metals cost escalation, how are you dealing with regular metals—steel, aluminum, copper? All of them have risen sizably in the first quarter. Do you have surcharges, escalators? How are you working with that with your customers?

Harold C. Bevis: Yes, you are correct. We are experiencing metal escalation, and we have the right to pass it through. We have to show POs that we actually incurred the inflation before we can increase our prices for the pass-through. We still have metal tariffs—copper from Germany and that sort of thing—so we also have tariff charges to pass through. We get a slight lag, but we do not have to wait until the end of a month or quarter. Once it happens, we present proof. We have been able to keep up with it because, generally speaking, we have raw material on hand at the old price. The game plan is: procurement has a lead time, you have a time period for an adjustment negotiation that you go through and prove it. We have had to adjust our prices, and it has taken active work by customer service teams. But, knock on wood, we have not had any material margin compression from that.

John Edward Franzreb: Good to hear. I will get back in queue. Thank you.

Harold C. Bevis: Thank you.

Operator: Your next question is from the line of Analyst with B. Riley.

Analyst: Hey, this is Remy Johnson on for Mike. I wanted to zero in on the new business wins guidance for 2026. It was nice to see the $42.9 million in new business for the quarter. How should we think about the cadence of wins as the year goes on, and what does that split look like between Power Solutions and Mobile Solutions? Thanks.

Harold C. Bevis: Thank you. Our pipeline overall covers each of the areas we have pretty uniformly. The hit rates are similar. We set goals for our sales team and business development team that obviously exceed our guidance—we are aiming higher than what we are committing to here. The goal is skewed toward our growth areas of medical, defense and electronics, and grid and data center, so the pipeline reflects what we are trying to do. In automotive, the outlook is interesting. Unit volumes are supposed to be down a couple percent, but the industry is not necessarily stressed because affordability is so high that wealthy people are the ones buying new cars, and they are still wealthy. The industry is viewed as healthy even though unit volume is down somewhat.

We are not getting the normal pressure like in a recession to reduce prices on new business. We are on the watch for that because it sometimes happens. We will let quotes go if they get below our margin bottom lines—this happens most in automotive—and that will continue. It is going to be driven by margins and our opportunity set. Right now, we see a good cadence to get to the new guidance we have given.

Analyst: Nice. Thanks for the color on that. And then looking at 2029 where the new long-term goal settles, could you share how the split might look between the growth end markets and the auto end market? Where could we see auto fall out in 2028–2029?

Harold C. Bevis: We are trying to get automotive to be 30% or less over time. We could do it abruptly and harm ourselves financially because it takes active work to be flat in automotive. You have end-of-life that comes upon you, and then you need to either be aggressive about the next-generation win for that same platform or pursue a different type of business. To stay flat in automotive is hard work. If we get to the point where we are outperforming in the other areas, we can start to price-clear ourselves on next-generation programs. Then it goes EOP and the sales are gone. For the moment, it is sizable for the company, and we are working hard to keep the business we want. In the last two years, we have gotten rid of a bunch of dilutive business—that is largely behind us. On a go-forward basis, it is about competing in areas that are profitable for us. If we could dial it in perfectly, it would be around 30%.

Analyst: Thank you. I will get back in the queue.

Harold C. Bevis: Thank you.

Operator: We have a follow-up from the line of Analyst with Noble Capital Markets.

Analyst: Hey, Harold. Did you talk this morning about the strategic options program? Maybe give us an update on what has been going on there and when we might hear more?

Harold C. Bevis: We do have an ongoing process, still evaluating our alternatives for financing or otherwise. There is nothing material to report or meaningful, so we do not really have an update. I do have an update on the CARES Act proceeds—we received that money. We have that in-house. That has helped with our liquidity and was also a driver of looking at our options because we were having a tough time with liquidity given the growth vector we are on. That is helping us a lot. The pressure is less, and we are being calculated. The Board is being calculated with its actions, and we have nothing major to report at this time.

Analyst: Okay. Great. Thanks, Harold.

Operator: You have a follow-up from John Edward Franzreb with Sidoti & Company.

John Edward Franzreb: I was looking at the slide on Power, and it seems like you were looking for new wins in certain markets that may not have materialized. Can you talk about that? What are the new program wins that you referenced?

Harold C. Bevis: In Power, we are prospecting to get more straight-up grid business. We have outperformed on the data center side of that. On the grid side, residential starts are down in the U.S., the EV craze has subsided, and the residential stream that was driving a lot of grid thinking has lessened. On the other side, the industrial side of the grid—tied to large equipment and large infrastructure investments—is outperforming. Historically, our grid portfolio was tethered to residential grid, and we are pursuing new wins in those areas. In terms of product category, busbars are an area we have been focusing on growing in, tied into the plating equipment acquisition we previously announced. We could not plate the big parts—most of them were silver plated.

The acquisition of that equipment from a customer who is also a very large electrical grid customer headquartered out of Europe is a big advancement for us. Instead of no-quoting business, we will be able to quote the full bill of material and be a more holistic supplier. We have fixes underway, and we are always looking at our hit rates and for pattern recognition to improve them. These are areas we know about and are focused on fixing.

John Edward Franzreb: And on the refinancing of the preferred—retirement or otherwise—it has been a multiyear process. Can you give us some color as to why it has taken so long, besides turnover at the investment bank?

Harold C. Bevis: We are actively looking at our alternatives. It is on the front burner. It is helpful to have better operating performance because you have better credit statistics when you look at the secured debt part of that. We are in possession of our outlook for the year, and you are too now. You see that we are planning on having a nice year, and the cash value of the EBITDA is going to be a lot higher because we are not doing plant closures and layoffs. In the last few years, we closed four plants and laid off 800 people, and that had a cost to it. The cash value of our performance was lower. Going forward, that is behind us. Our adjusted EBITDA has a cash value and is leverageable. We will have better cash flow to do a refinancing than we have had in the past. It is becoming a better situation in terms of a refinance story.

John Edward Franzreb: Got it. Thank you, Harold. I appreciate the color.

Harold C. Bevis: Thank you, John.

Operator: Your next question is from the line of Analyst with Bentley Capital Management.

Analyst: Thank you. Two questions. Number one, in your outlook for margins, your goal is to go from 18.5% to 20%. However, everything you said indicates you are pruning low-margin businesses—maybe another plant or two to close—and the new business is theoretically at a much higher margin. Why is your goal only a 1.5% improvement from 2025 to 2029?

Harold C. Bevis: It is a good question and a good catch. We are being conservative. We are not ready to change our guidance yet on that topic. The same comment also applies if you compare the EBITDA margin, Robert. We are looking at both for revising external commitments. We are closing in on them. You are correct—they look conservative going forward. We are aware of that. As we thought through how to improve our multiyear guidance, instead of changing the margin percent goals, we decided to change the time period to achieve them. That would be what is next, and it is top of mind for us.

Analyst: Are there still plans or businesses to exit that are marginally profitable or not making an adequate return for you?

Timothy M. French: At this point, we have nothing scheduled for closure. We have mitigated the impact of what we formerly referred to as the “group of seven,” and they are all performing in a decent fashion now. So at this point, there is nothing scheduled for closure.

Harold C. Bevis: I will add that we obviously have some plants at the bottom of a forced rank, but when you look at consolidation, the one-time cost to do it, the IRR of the project, and the disruption, we do not have any that check those boxes right now. We have better uses of capital than closing plants.

Analyst: Okay. Last question for me. How are you paying for the plating acquisition, and is it going to be a meaningful add to your revenues, or is it relatively small?

Harold C. Bevis: It is medium-sized, and it is in our thinking and guidance for the year. The equipment is expensive; installation is expensive. It has a lot of chemicals and requires proper chemical handling. It was in our base plan this year to do a product expansion in that area so we could more fully participate in busbar prospecting. It will come online towards the end of the year.

Timothy M. French: Yes, the end of the year.

Analyst: Okay. Keep up the great work. Thank you very much.

Harold C. Bevis: Thank you.

Operator: I will now hand today’s call back over to Harold C. Bevis for any closing remarks.

Harold C. Bevis: Thank you, everyone, for staying on the call with us and for the good questions. We are very happy about this quarter, and we expect it to continue, as reflected in our guidance improvement. We look forward to reporting out on our initiatives on the next call. Operator, Tamika, we will end the call today.

Operator: This concludes today’s call. Thank you for joining. You may now disconnect your lines.

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