Ladies and gentlemen, thank you for standing by and welcome to the Exco Technologies Limited first quarter results 2021. At this time, all lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Darren Kirk, President and Chief Executive Officer. Please go ahead, sir.

Thank you, Livia. Good morning, ladies and gentlemen. Welcome to Exco Technologies Limited's fiscal 2021 first quarter conference call. I am Darren Kirk, CEO of Exco. I will lead-off with an operations overview. Matthew Posno, our CFO, will then review the financial results. The format of this call will be the same as in the past. After a brief presentation, we will take questions. The call will end no later than 10:40. First, I would like to make some comments about forward-looking information. In yesterday's news release and on Page 2 of the presentation that we have posted to our website, you will find cautionary notes in that regard. While I won't repeat the content of the cautionary notes, we do claim their protection for any forward-looking information we might disclose today. In summary, we had a very good quarter. Our earnings per share of $0.28 is the highest such figure in any of our first quarters in our history. I am particularly pleased with these results given the ongoing challenges we are all facing with respect to COVID-19. I want to thank all of my Exco teammates for their fantastic efforts and of course commitment to working safely through such extreme circumstances. Before I start my quarterly operations overview, I would like to address the accelerating movement towards electric vehicles and the rise of several new non-traditional entrants into the EV market as it relates to Exco. I want to be clear that these changes are creating substantial opportunities for us. In fact, we are already seeing decent sales in strong order growth in each of our business segments from these trends. As it relates to our automotive solutions group, electric vehicles have much more cabin space with -- which is essentially additional real estate for us to sell our innovative and cost effective products into. We have won programs for key content on several electric vehicle platforms including with newer industry entrants. More encouragingly, customer discussions, quoting activity and new program awards are all gaining steam. In our tooling group, both die-cast and extruded aluminum components are increasingly being used in a number of structural automotive applications. This is especially true for electric vehicles, but for internal combustion engine vehicles as well. Sure the tooling we provide for engines and transmissions will inevitably decline. But this will occur only very slowly over a number of years. Growth in non-power train die-cast and Extrusion applications however, will greatly exceed this decline. In any event, our direct internal combustion engine power train tooling exposure currently makes up a very small proportion of our total operations, perhaps about 10% to 15% of consolidated sales. In addition, our products are getting larger and far more complex as the scale of application and engineering limits are pushed increasingly higher. This plays to our competitive advantage given our leading industry position in the engineering, design and production of the various products we produce. Simply put, our customers are looking to us to help solve problems and we are responding. As it relates to the operations in our automotive solutions segment for the first quarter, market fundamentals were decent. On a combined basis, industry production volumes in North America and Europe were essentially flat compared with the prior year period. Segment revenues in the quarter were nonetheless higher by 11% year-over-year, which represents significant content for vehicle growth. New program launches helped achieve these results. And we have high content on several refreshed vehicle models. As well contrary to our experience last quarter, we saw some inventory channels being restocked, and perhaps to some degree overstocked as to mitigate against possible future supply chain disruptions. On the cost side, our margins benefited this quarter from higher margin -- higher volume levels and increased overhead absorption favorable products mix shifts in general efficiency improvements. As well in our first quarter last year, we faced significant program launch inefficiencies and GM related [straight]costs. We continue to experience major fluctuations in forecasts versus actual order releases again this quarter. This occurred as our customers struggled to anticipate demand and understand their own plant production limitations. These challenges were pushed down the supply base in place strain on our production planning process. The intensity of this dynamic however did produce through the quarter. Nonetheless, despite the disruption and increased costs to keep our labor safe, we rose to the challenge to satisfy our customer needs of note our segment EBITDA margin improved to 17.5%, which is amongst the highest such bigger we've ever achieved. Looking forward combined, North America and European vehicle production levels are expected to be up sizably for the year as industry production normalizes, I expect our growth will comfortably exceed this trend for the year helped by the launch of new programs in the following quarters that are above the size we would normally see. Further out, we remain deeply engaged in quoting new programs that we increasingly expect will contribute as well as growth. In the Casting and Extrusion segment, overall market conditions continue to improve. This was true in both the Extrusion and die-cast production markets were order intake exceeded sales by a decent amount across the segment. Sales of larger capital equipment within the Extrusion channel remained relatively weak through much of the quarter however. Nonetheless, order flow for these products picked up in December, which will bolster our sales in the quarters ahead. Our Large Mould group continued to see a delayed impact from the OEM production shutdowns in our third quarter of fiscal 2020. This impact is exacerbated by accounting rules whereby we don't recognize revenue until the product is complete. I believe we've largely worked through this temporary suppression now and expect our Large Mould group sales will move higher in the quarters ahead as we complete work on our substantial order backlog. I would point out that while our segment sales were down year-over-year, they were up 15% sequentially. Despite the lower sales in the segment, profitability edged higher driven by favorable product mix various efficiency improvements, more balanced production loads across our plants, and lower steel tariffs and surcharges, which are a significant component is passed through to the customer. Our segment EBITDA margin was again fairly strong in the quarter coming in at 18%. While it is difficult to forecast this margin on a quarterly basis, we continue to expect the segment will realize overall revenue and EBITDA growth this year. On the capital deployment side, we continue to advance our various strategic priorities including Castools new Greenfield plants in Morocco, heat treatment facilities for several of our tooling group locations and opportunistic purchases of capital equipment where we found deals. We didn't buy back any shares during the quarter, although we may in the quarters ahead. We remain interested in acquisitions but have a lot on our plate with the organic growth initiatives we are currently pursuing. We intend to direct our growing cash flows toward these initiatives. But to the likely extent our cash flow still exceed this usage, we will gladly pat our balance sheet further waiting for the right opportunities to develop. Lastly, I am extremely pleased to announce that yesterday our Board of Directors approved a $0.02 per share increase in our annual dividend to an annualized rate of $0.40 per share. This amount represents just 36% of Exco’s trailing 12 months free cash flow in March, the 13 times Exco has increased its dividend in 12 consecutive years. As you are likely aware, that's an exclusive club. So in summary, again, we had a very first good first quarter with our year getting-off to a record start. Despite the significant challenges we all face today and meaningful near-term risk in the broader market. We are very well positioned to continue this momentum in the quarters ahead. That concludes my operations overview. I will now pass the call over to Matthew to discuss the financial highlights of the quarter.

Thank you, Darren. Good morning ladies and gentlemen. Consolidated sales for the quarter ended December 31 were $121 million, an increase of $1 million. First Quarter sales or automotive solution segment increased $7.8 million or 11% and the Casting and Extrusion segment sales were down $6.8 million or 13%. Over the quarter exchange rate movements had a negligible impact on sales. Consolidated net income for the first quarter was $10.9 million or earnings of $0.28 per share compared to $8.1 million or $0.20 per share in the same quarter last year, an increase in net income of 35%. The effective income tax rate for the quarter was 22% compared to 18% in the prior period -- prior year period. Income tax rate in the prior year quarter was favorably impacted by the recognition of deferred tax assets, an increase in earnings in jurisdictions with lower tax rates. Excluding the recognition of the deferred tax assets the effective income tax rate for the prior year quarter was 20%. The automotive solution segment experienced 11% increase in sales in the first quarter or increased a $7.8 million to $76.1 million from $68.3 million in the first quarter last year. The increase compares favorably to an overall industry vehicle production volumes in North America and Europe, which are relatively flat in the quarter. Segment sales are supported by program launches, higher order volumes favorable product mix and higher tooling sales. First quarter pre-tax earnings in the automotive solution segment total of $11.6 million, which is an increase of $3.6 million or 45% over the same quarter last year. Key factors in these segments improved margins include improved cost absorption with higher sales, cost reductions, improved operational efficiencies, and favorable product mix. In addition, the prior year quarter segment pre-tax profits were negatively impacted by adverse exchange rate movements, the impact of the General Motors strike and certain program cost inefficient. The Casting and Extrusion segment recorded sales of $45.3 million in the first quarter compared to $52 million last year, a decrease of $6.8 million or 13%. The sales decline is mainly driven by the deterioration of general economic conditions due to the impact of COVID-19 changes in product mix and delivery timing, as well as lower steel costs generally. Although sales are down compared to the first quarter 2020 sequentially sales were up $5.8 million or 15% compared to the fourth quarter of 2020. This 15% quarter-over-quarter increase reflects demand across large mould Extrusion and the Casting groups. Pre-tax earnings in the Casting and Extrusion segment improved by $300,000 or 7% over the same quarter last year, this represents a 25% increase in pre-tax profit margin in this segment. The earnings improvement was driven by improved fixed costs absorption with more balanced sales across Extrusion divisions a favorable product mix shifts of Castool. Exco generated cash from operating activities of $9.6 million during the quarter and $4.6 million of free cash flow after $5 million in net capital expenditures. This cash flow was more than sufficient to fund that $3.7 million of dividends. Exco ended the quarter with $26.5 million in net cash and $75 million in available liquidity, including $35.2 million of balance sheet cash continuing its practice of maintaining a very strong balance sheet and liquidity position. Exco’s financial position remains very strong. As such the Company's balance sheet and availability under the existing credit facility allows considerable flexibility to support strategic capital spending, dividends, share buybacks and other opportunities that may arise. That concludes my comments, we can now transition to the question and answer portion of the call.

[Operator Instructions] Please stand-by while we compile the Q&A roster. We have a question coming from the line of David Ocampo from Cormark Securities. Your line is open.

Hi, good morning, everyone.

Good morning.

Good morning David.

Darren, I think your guidance last quarter was to outpace the automotive industry by around 5% to 10%. So if I had to break that up between market share gains and just vehicles getting larger, how should we square that up?

Thanks for the question, David. It is difficult to give you a complete breakdown on that. I mean, there's a number of moving factors that are going on there. As I mentioned last quarter, we did kind of expect to get to the upper level of that range. And there's -- the vehicle production was flat. And then we did have a number of new program launches. And those program launches were on a number of vehicles that were refreshed and then had a bit of a sales boost from that effort. There was also some inventory restocking going on, which has gone in the other direction, in our fourth quarter of 2020. And to some degree, we believe that the supply chain is bolstering up their inventory levels to -- I guess prepare for any disruption from COVID given the emergence of other variants and things like that. I struggled to quantify each of those for you. But some of each.

That's fair. And probably that’s zero in on margins in automotive solutions and so is quite strong. Is this sort of that new norm that you guys can expect going forward or can it actually go much higher as those lower margin contracts begin to roll-off? Like, what's the delta between the new margin contract and the old ones?

I'd like to think it's the new norm. I don't want to get that aggressive with any guidance. I mean, we do have some other programs that are launching this year that may have some front-end compression associated with them. But to the extent that overhead absorption has improved significantly in this quarter to the extent that the mix and the volume levels remain where they are, there's certainly no reason why we can't continue to enjoy such good margins like this.

Okay. And that was the split on government assistance that you guys have in the quarter. I know it was pretty small, but by segments --?

Just over 450,000 in the quarter, it was in our last note in the financial statements.

Yes. What's the split between Casting, Extrusion and automotive solutions?

I’d say, yes, about two-thirds – one-third, two-thirds Casting and Extrusion.

Okay. That's great. I'll hand the call over.

[Operator Instructions] Our next question coming from the line of Peter Sklar with BMO Capital Markets. Your line is open.

Yes. Good morning, Darren and Matthew. Darren, in your commentary where you were discussing electric vehicles and kind of the dynamics that underlie that you spread a statistic of 10% to 15%? Could you -- I didn't quite catch that. Could you explain that? What that represents? Is that your power train exposure?

Yes, that's roughly the power train exposure. And you can assume that a good piece of the Large Mould group and some of Castool.

Okay, so that's largely making dyes for engine blocks and transmission covers and plus some consumables out of Castool. Is that how we should think about it?

Yes, that's, I used to think about it. I mean, it's a relatively small portion of the business now. But as I also mentioned the power train work that we have is ongoing. In fact, in the quarter while the Large Mould group has continued to have some revenue suppression as a delayed impact of COVID, the order flow is substantial. I mean, we've been running with book-to-bill or order flow as compared to sales of about 50% higher and we expect to start shipping on that in the quarter ahead. So you'll see some revenue pickup.

Okay.

And that's -- that order flow is across the Board and certainly some power train stuff, but non-power train components as well. And several new customers, I will add.

Okay. On this -- like this new kind of Castool expansion plant in Morocco, like given that you've had the experience in Thailand, I assume building an equivalent kind of operation. Can you talk about -- like so, like in Thailand, just how did the ramp go? Like, how long does it take to build up? How long before breakeven? Can you put it in the context, does Thailand help you put that into context as to what the maturity curve looks like?

Well, it's going to be tough to give you guidance on that Peter. The Castool, Moroccan plant expansion is all about taking additional market share in the European market. And I guess to the extent that we're successful as we expect to be that ramp will be fast and if not it'll be a little slower. But generally these plants if I look at our Mexican Extrusion plant, we were -- EBITDA positive in the first year and it's pretty much positive profitability at this point. So there is -- I think we're pretty optimistic that that ramp is going to go pretty well, but wait and see.

But do you supply like -- like do you supply European die-casters from Castool here and Oxbridge or they have to go out --?

Yes, we do fell into Europe for both die-cast and Extrusion from Oxbridge. And for the larger Extrusion capital components, we really can't be competitive. And when you don't get that relationship on the capital side, it's hard to follow through on the consumable side. And even on the die-cast side, we had competitive disadvantage due to distance and so we do sell in the Europe, it's not a huge part of our revenue for Castool and this will open up the avenue to improve that.

Okay. And then lastly Darren like in your commentary, you said that you're happy to build up cash for the right opportunities. And when you referenced opportunities are you talking about acquisitions or are you talking about building new plants similar to the -- this new Moroccan facility or all of the above when you think of the opportunities?

All of the above. We've had a long track record of Greenfield growth and the Moroccan plant is the latest one. But it's too early for me to announce what we're thinking of here. But we're certainly thinking of new Greenfield investment opportunities from the demand that we see. And we continue to look out for acquisitions.

Okay. And just so sorry, one other question on this new plant in Morocco, like who had Exco was taking the leadership and launching this, is it Paul Robin, similar to what he did in Thailand?

Paul and his team, Castool.

Yes. Okay, great. Thanks very much.

Thank you.

[Operator Instructions] I'm showing no further questions at this time.

Okay, with that, I guess we can move to conclude the call. Appreciate everyone's time this morning. Look forward to talking to you again next quarter. Take care.

Ladies and gentlemen that does conclude conference for today. Thank you for your participation. You may now disconnect.