Thank you for standing by, and welcome to the Phinia Q1 2024 Earnings Call. [Operator Instructions] Finally, a reminder that this conference is also being recorded. I would now like to turn the conference over to Gordon Muir, Vice President and Treasurer. Please go ahead.

Thank you, Pauly, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on Phinia's Investor Relations website, including a slide deck that we'll be referencing in our remarks. We're also broadcasting this call via webcast. Joining us today are Brady Ericson, CEO; and Chris Gropp, CFO. During this call, we will make forward-looking statements, which are based on management's current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filings. And with that, it's my pleasure to turn the call over to Brady.

Thank you, Gordon. Thank you all for joining this morning. Our team continued to execute on our strategies and delivered another strong quarter. We remain focused on consistently delivering value-added solutions to our customers while continuing to drive long-term value creation for our stakeholders. At the same time, we demonstrated resiliency in the face of challenging industry conditions in most of our markets. I'll start with some overall comments on our first quarter performance. Chris will then provide additional detail in her financial review before opening up the call for questions. Starting on Slide 4. Adjusted sales in the quarter were $846 million, an increase of just over 1% when compared to Q1 2023. This was driven by favorable pricing and currency, partially offset by lower commercial vehicle sales in Europe. Adjusted EBITDA and segment margins came in much stronger due to some onetime customer items, supplier settlement related to prior year and good execution by our operations. We reported adjusted EBITDA of $131 million and an adjusted EBITDA margin of 15.5%, a 160 basis point improvement over prior year. Total segment adjusted operating margins were 13.6%, a 270 basis point improvement over the prior year. Although I'd love for this to be our new normal run rate, some of the onetime items I just mentioned helped us by about 100 basis points in the quarter. Q1 2023 was also an easier comparison as we had limited inflationary recovery during the year ago quarter. We continue to make good progress on the transition from our former parent and believe that we are on track to exit all material transition service agreements or TSAs and all contract manufacturing agreements or CMAs by the end of this summer. Our balance sheet remains strong with $325 million of cash, net leverage below 1x…

Thanks, Brady, and thank you for all for joining us this morning. As a reminder, we will discuss our results and outlook. Please keep in mind there continue to be TSAs and CMAs with our former parent, which we are rapidly phasing out. In addition, reconciliations of all non-GAAP financial measures that I will discuss can be found in today's press release. Moving to Page 9 in the deck. In Q1, we generated $846 million in adjusted total sales, up slightly versus a year ago. Our aftermarket business benefited from higher pricing and positive FX for an increase of 3.1%, whereas Fuel Systems was impacted by lower CV revenue in Europe, offset by inflationary price pass-through. Our adjusted diluted earnings per share was $1.08. We earned $97 million in adjusted operating income and $131 million of adjusted EBITDA, resulting in an adjusted operating margin of 11.5%, which represents a year-over-year increase of 170 basis points, while the adjusted EBITDA margin of 15.5% represented a year-over-year increase of 160 basis points. Of note, when compared to the prior year, the results in both the first and second quarters of 2023 reflect timing differences, making for uneven comparisons for these 2 periods. More specifically, the first quarter of 2024 benefited from the pass-through of inflation whereas in 2023, a portion of pass-through was delayed to the second quarter. A supplier settlement of $10 million, of which $7 million is a onetime retroactive recovery. And finally, we had strong product sales mix and a favorable currency impact. From a core business performance standpoint, our segments reported strong overall margins. Q1 segment adjusted operating margins were healthy at 13.6% as our aftermarket segment expanded to 17.9% on the back of inflationary price pass-through and positive product sales mix. Q1 Fuel Systems margins were strong…

[Operator Instructions] And your first question comes from the line of Jake Scholl from BNP Paribas Exane.

Congrats on a great quarter. Could you just provide a little bit of color on how we should think about seasonality for the rest of the year. So into the second quarter, we have to roll off some of the onetime items, but are there any other factors we should keep in mind.

No. I think it will be kind of consistent with last year. I know a lot of people want to get into specific quarters. Things are going to move around always just a little bit depending on when holidays are and when the end of the quarter ends. In general, Q1 and Q4 from a revenue standpoint tend to be a little bit lighter. Obviously, we have some shutdowns in Europe in the summertime as well as in the U.S, but Q2 tends to be a good strong quarter in Q3. So again, it'd probably be similar kind of cadence with last year from an overall revenue once you take out the noise from any customer recoveries.

Got it. And then now that you guys have cleared up some of the more restrictive covenants you had in the initial term loan B after the spin. How should we think about any shifts in your capital allocation priorities?

Well, I think the capital allocation priorities kind of remain the same, but obviously, we don't have the restrictions. The TL B restrictions had a lot of limitations on both dividends and buybacks as well as some punitive cash sweeps if we got anywhere over one time. And so I think it will free us up a little bit and allow us to utilize more of the cash that we have on hand because we do continue to have probably more cash on hand than we need. So we'll look to deploy more of that as well. And with us paying down the revolver, our liquidity is now over $800 million. And again, that's probably excessive.

[Operator Instructions] There are no final questions at this time. I will close the Q&A session and hand back over to Brady Ericson for closing remarks.

Great. Thanks, everybody. We look forward to building on the achievements of the past quarter and moving forward with a clear line of sight on our long-term goals. Thanks for joining us this morning, and have a nice day.

This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.