AIMC - Earnings call transcript Q2 2020 | Altra Industrial Motion Corp

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Altra Industrial Motion’s Second Quarter 2020 Earnings Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I’d now like to hand the conference over to your speaker today, David Calusdian, from Sharon Merrill. ahead. go Please

David Calusdian

the morning, to help Good they welcome the Relations posted to be Presentations Events Thank the X. in follow everyone, management’s To Investor on are that you to Please call, website discussion call. under referencing & turn you. section. slides and altramotion.com Slide on will this

Act statements the Private in the management of During XXXX. defined call, will as be Litigation making Reform forward-looking Securities

differ should will must by statements applicable or other Motion EBITDA, management’s company’s Industrial alter significantly information, forward-looking on and operations, statements to over our non-GAAP does Measures reviewing and now are the financial company’s other of non-GAAP believes margin, in available the non-GAAP I’ll could to that in Commission. non-GAAP income Executive of Non-GAAP Slide inherently sales, On discussed Discussion Officer, the Form as that non-GAAP Christenson; are Forward-looking report measures free adjusted non-GAAP Officer, other adjusted Chief non-GAAP cash tables release margin, intend results otherwise. Storch. and operating as be on Chief flow call the factors XXXX non-GAAP presentation net future and continuing and gross Carl X. XX-K, EBITDA on excluded certain Altra’s Carl. operations. XX-Q under earnings any Securities the items from today’s flow. our cash to reconciliations its from Exchange items net Except to financial investors Please press turn uncertainties measures organic recognize adjusted non-GAAP not in filings Altra’s to new to comparable law, me and in refer quarterly turn with Christian expectations. reports margin, Altra metrics income, heading With and non-GAAP are result management Please non-GAAP the U.S. non-GAAP release non-GAAP operating required press The a Form today annual diluted and events refer capital, Financial and uncertain risks, of when website. whether management per events GAAP described share, income update debt, QX the or Corp. These of call, exclude Financial the in working the slide

Carl Christenson

cash resilience David. exceeded as second you, all Altra’s outstanding our you joining of and turn downturn. was for quarter Thank perform today, please our business Thank we for to model to our the Slide generation, execution demonstrating in profitability and and expectations us revenue, a X. well ability

Although and COVID-XX caused the pandemic persist, encouraged we the few a continue have key uncertainty by out. been playing headwinds factors to are that by

be cash-generative is the adversity. resilient of to First, face model similar proving XXXX, to our business in

businesses. from benefited we secular markets, and merger. have our further of legacy end expanded that result to cyclical we our markets of broad exposure trends the PTT A&S have our which The some several end Second, has to less in a better enhanced be believe as merger

Altra’s factory markets as several And outperforming the are continues end seeing we customer with that the we of in are than verticals, expected base, demand. several our value Third, finally, serve key competition stronger deeply including resonate to proposition automation.

to line industrial a needs, As that strategic continuously positioning we on presented leveraging These sustainable navigate growth. our value strength the on and as the margin enhancement, long-term. on priorities steadfast and challenges focusing drive delivering sheet we Altra premier the focus advancing delevering through include pandemic of the deliver on top by our company, Altra near-term over remain customers’ balance our

points to the X. more moments. detail as three I in in to a would it Slide turn Christian like key relates please second will But quarter for financial few performance. by quarter to results cover Now the our making start

top year on wind strong to First, with Class well our A with of $XXX.X energy a demand truck on certain markets, to million, markets million environment. $XXX.X and during China, a our outperformance sales The in overall the compared ability the performance as ago. capitalize line, somewhat was notably we expectations better-than-anticipated macroeconomic a exceeded due largely tough in as

term onsite Notably, very the revolver Second, margin drew an quarter. manage the of the points by pandemic, of loan and and as substantial extraordinarily our line A of XXX million, second of work our top practices, social diluted including do to employees, cost portion I’m protocols tremendous checks, same I’d best follow continued delivering teams debt of fellow diligent to debt post-pandemic led implementing priority has sustaining safety And level presented remains we despite sanitizations. success for Altra. employees included additional up productivity costs protect to continues repay we which with other basis non-GAAP our while healthy of providing of aggressive and temperature bottom safety To associates by to have the in world. in Altra conducting down at Please realities onset of Paying Altra earnings through global the per well we keeping we business This visitors us proud safeguarding Starting closer XXX% in pandemic, continue limiting efforts in and the put Slide third, the turn quickly take the remaining in flow on income maintaining QX, PPE, remained down and year-over-year our focus vigilantly practices safeguard to ensure safety for and million EBITDA to team’s $XX.X X. made distancing cleanings our deep able actions and decline so, the our protocols, $XX a per in excellent a had quarter the share frequent savings was these $X.XX allowed are guiding to our customers sales, of to time COVID-XX current to cash reduce relentless or high. to that across shareholders. progress at with our performance. adjusted personnel, remotely from the to share employees, positioning areas. like the net employees. of as in the we principle place at to continuity, XX.X%. look $X.XX. generation, four

to continue restrict and nonessential to also We future. company continue expect to travel the so foreseeable for do

to have to on ensure taken Moving we continuity. business actions

many we job team opportunities. optimizing minimizing of As we businesses ensure and markets to disruptions began processes an systematic and Altra reopen, second were incredible the did to through and the moved quarter implementing

maintain and components to businesses with all of take materials proactive the minimal to essential meet many the supply customer demand Our supply interruptions chain serve. teams have across continued to including we measures industries,

our that have were manufacturing also shutdown back online. nearly successfully QX of in We brought facilities all

in such where market required adapted as continues operating equipment equipment. strengthen have their and They’ve approach manufacturing in to implemented gas the level managing at engine respirators to been components implemented reduce moving on the global aggressive China to a unexpectedly all end flexibility costs and job rolled in job such and systems social and an costs, demand. dropped to facilities balance teams actions XX meet order teams Our tremendous The merit and on strong, demand distance up entire financial expenses. wage new setups braking ramping where garden take for to as And a travel areas in increases, suspended service managing incredible checkbook Altra’s a current demand operations sheet costs. ventilators. are also discretionary furloughs, focus executive turf are our protect the oil precipitously, customer expenses, reduced organization for of suspended and weekly majority to has environment. provider and back vast We and for increases, nonessential doing spending The components done all and

into in The these have cash of have and started flow organization by actions continued QX inflows were what on buy necessary. in and Some in checkbook which – managing managing were very through at each unit and focused has started the absolutely only people every continued weekly through approach, business’ sure business is QX QX. is level proved effective and outflows on at the of a cash QX basis, making level

Additionally, benefited to elective near expand upon, came medical a surgeries and non-emergency as lower care QX, significantly in expenses healthcare from as halt. U.S. we Christian will

As actions a and remain the upon necessary, if liquidity that of actions and act can we’ve we cost taken will the we that result be cash additional we maintain we confident strong identified flow. to able

we Moving on to world. theme, fourth stronger be in Altra offense as emerge company post-COVID-XX the to the to a position playing

Here, we the resilient as and to operations for in have long-term own our be inevitable as on changes possible efficient workplace. the optimizing focused

automation required fluidity cells importantly, focused situation. ongoing in for of to adhere to cells operations. social so work our adapt working produce on of are necessary, flexibility, additional as redesigned equipment, have we to we treatment the and given components COVID-related distancing, We can some are on the Most converted proper

online We’re medical also to and safety; spending back; on purchasing that talent both for on capitalize packaging the elective of the as and automation possibility stimulus; and factory surgeries investing move of of demand and the position market related and trends, the capabilities the as to processing, the from infrastructure growing equipment, opportunities post-COVID component robotics; increased demand in Altra demands and emerging potential the we near-term once reshoring; and related reliance come a focus could new on towards to to defense and the emerge food increased equipment such the growing increased equipment heightened ensure for COVID logistics. related government needs that possibility

This review with end continue virus demand includes we the a significant by participation drive and limited weak visibility customer June a a customers fall Now, webinar Slide our winter, activity increase overall activity, please very in of demand. market as or cautious evidenced resurgence high X in compared development. the technical degree the to as of improving We’ll possibility May. by in engineering given remain encouraged turn and were to of developmental product market when to the strong strong

increase, improvement the an this stabilize, encouraging and pandemic. an we While activity to yet we as once markets meaningful the this could rate emerge sign that translated begin increased see into from we hasn’t order see

in in turning digits continue in the with a sequentially, up those as well double strength the review up we digits was energy that starting single Now and see QX performed to low wind. to Renewable of quarter. markets,

rate again Factory unrelated may in up that for the Altra strong QX rate. year to once emerge quarter. automation We a and digits. customer the supply began constrain chain We due of wind machinery was encouraged slowing to in see balance growth tougher the growth see some industry and specialty were expect possible build single to comps and our the to to issues that for high

favorable impact positive in the continued a momentum The and to for need and market segments. in We the semiconductor positive automation, tech see the the up XG market accelerates factory expanding for digits ag mid as expect electronics quarter, headwinds situation was in COVID-XX was automation, the has single our upside primarily single and we to trend of spread second-half with serve businesses the of across digits comps, into should which XXXX. down operating faced The several Aerospace remaining markets mid QX. QX. in defense due

see was was to off low many a more been our continue Europe. demand trucks, with a offset strong automotive and by We which to aerospace the weakness strong by in of soft double where North customers, and digits China has due offset Transportation to commercial – America decline performance than in heavy-duty defense in market.

this European of return by markets, Distribution digits demand down and We more well. sings China. levels be improving truck and offset for may A are sequentially Class by that a normal to American the in was quarter emerging double as the low in but expect encouraged North

construction which decline driven believe to markets economy, across weakness track by we and couple quarters. line the next was with suffer of for the automotive distribution in double and gas, digits, expect Metals oil will general We down the primarily industrial industries.

the to down for balance the soft markets In the commodity the mining, for metal be double year. We low was quarter, demand to expect by digits prices. continue of impacted

was with a in well down year. double to discretionary aftermarket to as decline due we both digits, OEMs, the pressure also and move equipment large part as through garden in the spending. Turf expect as We continue new this

reduced this demand balance of expect to industry through and well to trade We XXXX. gas lingering remain was COVID-XX, global Oil tensions. market as down digits, reflecting weak due as the double

down offset remain to counts again year, the and other Medical versus in where of by was of the oil a low duration was of the gas rig for we was of hospitals. related elective cities price strength up ventilators, demand fight meaningfully capital It tale components the COVID-XX the will two decreased and partially surgeries but expect through the digits equipment against respirators, down medical for for sequentially. reduced and With last quarter, spending oil under and pressure year. rate once double equipment and

shipments into year. Christian I’ll And call move turn over the the market to Christian. expect we We through to improve the that, as to this – call with turn

Christian Storch

you, Please Thank Slide X. turn morning, to Carl, and everyone. good

Let’s performance. line start of with a top review our

FX compared the Excluding period. with sales effects, declined year prior XX.X%

price points, of basis Foreign exchange rates effect impact XX negative of had had while positive strong points. XXX a basis a

quarter Excluding the compared exchange, geography. the effects decreased segment down PTT look sales Taking XX.X%, year. performance with of for while a our last sales for foreign A&S the segment net net same were XX.X% at the by

saw China. XX.X%, XX.X%. in growth excluding and absenteeism America, over wind clutch by into performance very while North with demand of was This and of with XX.X%, down driven decline world also Asia strong was rates. In market XXX%, year-over-year JVS XX.X%. decline were in and America the Europe, FX. This sales the up strong sales plant saw high the primarily business shutdowns rest was brake revenues a and up the by a partially effect performer in energy driven our revenues temporary North sales In we declined

Our these costs manage to environment. of a job great the proactively to in in cash do current proactive times. taking teams included This continue managing measures uncertain

of SG&A the were percentage able result sales percentage as operations to as at million, the were actions $X.X XX.X% flat, reflecting from only We Despite in As increase delever the these second with in and a margins cost gross quarter, a profit quarter. a the decline, declined to sales. in income million $XX.X we of operating of hold expenses savings reduce of quarter. magnitude non-GAAP pleased income our the the revenue ability approximately

quarter discrete year. designation. XX adjusted items. tax We our net or operations the compared XXX Non-GAAP about look reduction high-technology first path basis this flow income quarter, a in approved This a $XX.X cost for EBITDA – reductions, XXXX are basis provision XX.X% year. closer rate to was in China XX% the for Please due was of includes normalized have XX% second on a to at last sales, rate points turn the Slide of at to tax income confident that before of and for for up cash million second to liquidity. a delever to one realistic we recently The the for XX.X%

quarter, the reduced The in non-emergency rent care During for of employees. and as quarter preventative areas approximately costs a significant business. estimate million the all $X contributed also performance of decline quarter, of result come U.S. third costs to from back Furloughs to the reduced would medical headwind. the effort We Carl and benefited these creating sequential we in costs. costs, healthcare abatements mentioned, as in a reduce

despite compliance to We a in growth flow revenues. our $XX.X on Capital first loan revolver the year-to-date, term XX% second-half, in million, down the and down the we cash, $XX.X we which are paid We plan expenditures in prior as cash our since year’s drew XX% XX.X% our a $XX $XXX We year acquiring with that from to with of extremely higher million quarter with of quarter million non-GAAP initiatives. totaled delivered than the relative the of we during covenants adjusted million that we total pleased of bringing strong $XXX.X remain in A&S plan very under down the $XX quarter the balance we to We financial in free of that which quarter. This levels substantial comfortable have quarter, down credit the million quarter. is capital generation number expenditure with the increase second last the of billion, We we segment. committed invest repayment reflects sheet. to room paid million to $X.X in ended our the facility. decline remain the $XXX the maintenance debt deleveraging the second million almost

million and and XXXX we October have no Our unsecured not as $XXX senior XXXX. are covenant short-term until October exclude these notes we debt of the outstanding, due terms maturities, have

use in – leverage continues of debt, terms priority the to reduce and current optionality environment for top growth. future manage cash, In be of investing to our preserve in

As of a practical of earlier to dividend announced week, reflect review of guidance quarterly COVID-XX potential Please full-year maintaining XXXX. and for to our the assessment for impact our the outlook Slide we $X.XX are of estimate time. Today, turn at our business we this a our share. best XX to for our increasing this are XXXX

line prepared the top We continue closely implement decelerate. cost further reduction monitor to should demand and are to measures situation

that revenue in the as we we assumes the sequential saw sales modest in at same in experience quarter, we guidance the not expected level. will Our second will quarter third the repeat some strong decline China

growth modest range due expect increase see as provided before range. sequential million our assumes expect million, will of The background, of factors. guidance annual $X,XXX that in sequentially quarter. We we that sales also the again fourth mentioned to high-end now $X,XXX to we the previously a With in SG&A the the expenses

EPS We a and on basis, guidance are GAAP as raising indicated. non-GAAP previously

of Following and and now non-GAAP EPS by diluted net to the EPS the to took acquisition-related of the EPS. in of first charge A&S $X.XX of we quarter the the impairment $X.XX, to range from $X.XX loss of combination, expect in amortization, GAAP net primarily we exclude driven a range non-GAAP a We income in diluted loss non-GAAP began $X.XX. tax

range $XXX our EBITDA non-GAAP to to adjusted guidance also are of raising the million. We $XXX million

the to to expect and to to of on the in track pay balance debt of delever down XXXX XX%. over remain continue XX% We range

million $XXX range to in million to and $XX $XXX of range the in $XX million amortization capital of and depreciation the million. expect expenditures We

of the we full-year with a expect cash $XXX back discussion to XX%, for rate Carl. that, and million. the flow will adjusted And non-GAAP turn in expect to tax of We to to be normalized range the range continue free XX% million $XXX to in the I

Carl Christenson

Christian, to we please drive reduction during top to our debt resilience and and have team’s turn business focused of to line Thanks, stay ability downturn. Against maintain our cash taking and model a challenging backdrop, Slide flow the performance, actions good the demonstrated XX. incredible while swift to

We’re industrial positioned I controlling growth to premier continue challenging Altra economy a and you when this the emerge short-term, the our in believe to leave protecting what with a company necessary recovers. we through drive the resources to can and stronger reasons the four is deliver as navigate thrive for period, we value while will company global shareholders. as long-term control to

First, fundamental of key early our Altra. the end to our strength model diversified several strengths continue exposure cycle business and that will are markets to benefit

COVID-XX system, and the resilience business. Altra’s to the of business our Second, organization crisis and culture demonstrated has put the test

scenario we our prudently year. this flow bolster flexibility, savings continue to Third, plans our and to strong date cost of our manage cash initiatives, financial and support liquidity and sheet execute to performance balance expectations

Finally, putting position deliver plans high-value proud of and times. we in to efforts motivated our ways. our these the customers, new serve future, unprecedented strategic extremely community, to and maintain and thrive our I’m to collaborate, are remain in in shareholders our Altra in employees the place productivity, Altra team’s value

company. forward we up updated as our customers, the the progress, support will Altra now partners look vision that, We’re as on for grateful you we a questions. And and our of for ongoing premier shareholders industrial call with open realize our to keeping and for

Operator

Hammond from Markets. question comes first you. Capital from Instructions] [Operator KeyBanc Thank Jeff Your

Your open. line is

Jeffrey Hammond

Hey, good guys. morning,

Carl Christenson

Good morning, Jeff.

Jeffrey Hammond

Great a tough in performance here environment.

to here. Just understand margins decremental want

a for that? guide And had coming in I first like thing, of the the It the – of low-XXs the little just just higher wondering sustainable think looks businesses the healthcare million back. how maybe second than decremental you like it is bit quantify a But maybe looks maybe in quarter. decrementals kind $X that’s said margins?

Christian Storch

Yes.

elective healthcare million sequentially healthcare will a in million not that now drop There last back, costs that possible quarter $X.X doctors, So year’s below healthcare the $X that are normalize. significant will surgeries and $X start is were are million visiting cost. cost. Healthcare to of that is the to come $X.X people continue we And second will in again, expect million again, costs.

first-half then, second-half $X in of also quarter we’ll for in second-half the addition We not in concessions revenues to the million got that That that, the continue. revenues. seasonally, will rent second second you’ll the in are And typically us see quarter. for see below

in the that China year-over-year, be with in year-over-year. will the as some was combined one-off I some over will quarter. XXX% in which wind not up in JVS over demand not there up was performance seasonality will repeat we pent-up China in business the China, So recovered saw continue. mentioned, XXX% second various that

that see in So $X of And headwinds we’ll amount in of about $X the some healthcare had and $X significant So of well. will million, that million; as regard furloughs $X QX, in between about that and quarter of million, makes we that headwind. as second $X as come the back up QX pool million EPS in rent that then million provides well furloughs

Jeffrey Hammond

for you the what decrementals are in second-half guide? So looking the within

Christian Storch

we about can do extremely in the well, into if XX%. say, we is what than that better XX% and But high come midpoint high-XXs. So – assumes. I’d the slightly think do the We

Jeffrey Hammond

Yes. some telling just getting you of your these And trends just the And order wind of are other what the rates look relative where you slide, market you maybe just areas? of move the can kind through of I at to talk talk sequentially or sales as you maybe – you mentioned China better are about about and if then some end worse kind trends okay. the quarter? think order getting but truck,

Carl Christenson

Yes.

was Jeff, in saw May an order – that was of think, the trend, general, be appears to I we what kind bottom. from

and we got of the I’d the currently the I part indicative think the in what in. July, those saw as And And that XX%, market, XX% of And markets different of maybe probably each rates that now decline one that’s we booking XX% to we just – occurring see those of is neutral we markets. – we think support around up through tracking, trends bookings we’re probably the we or right markets, seeing – will one them So go think we’ve By serve for And support a June, see we’re it’s trend that guidance. I XX% I say, each the our end do were I guidance. then nice guidance. a but rate saw we support in we’re recovery. there out most see for XX% hope…

Jeffrey Hammond

The June? July rates than bookings were better running

Carl Christenson

No. June. No, no, I think, line no, Maybe… in they’re with

Jeffrey Hammond

Okay.

Carl Christenson

a …and real month standpoint, from a got purposes. exciting July you maintenance typically vacations, booking isn’t because plants you got on people for shutdown being

So kind say, be in is it with odd in they’re what But – we’re an July the June. month. of I’d can line seeing

Jeffrey Hammond

are Okay. from – June in May dramatically? you where seeing the markets recovery But rates what most that the

Carl Christenson

it’s really Board. across So the

we The helped that business oil having it’s had a across Board. very pretty so bookings. defense – But weak the that, gas that, that some much good really impact orders isn’t and the on is So it. an

guys probably that garden and think was down. sell-through than there’s into through seeing they’re what is big turf and our box some chewing inventory. way the think better I the We business we’re

bit an generally in garden, So the and that turf a little uptick saw we but across Board. it’s of

the nicely. is in North A up Class in America the of trends we’re business Europe seeing really nice that and One pick truck

that’s since that probably been the is improvement that’s So market, in the substantial. April/May and biggest change timeframe

I last indicates that is the nicely think a here. out trucks build report night, rate there too, improving for was

Jeffrey Hammond

one, going final rent one and in the line healthcare concession corporate sneak that through there? expense could was I if just Was positive. the the then And Okay.

Christian Storch

guaranteed on allocate therefore so we budget expenses the for Yes, program. a a corporate rate, – at to a cost with healthcare providing them opcos Yes.

this you all reallocated the corporate, corporate than So every with the under on or in corporate corporate actually and healthcare of in was furloughs spent. services, that not continue. at we rent When office, at actions the took office, cost that we get you professional it will end swing overperformance that more the that’s books positive expenses case, that combine up whether

Jeffrey Hammond

Okay. I’ll get guys. queue. back Thanks, in

Carl Christenson

right. Jeff. All Thanks,

Operator

from question Baird. Halloran from Your Instructions] [Operator next Mike comes

open. is line Your

Michael Halloran

guys. morning, good Hey,

Carl Christenson

Good morning.

Christian Storch

Good morning.

Michael Halloran

working how on looks into channel then inventory, it you So your just maybe tracking how thoughts and today level capital is from weave some and your well? for look side the perspective, as inventories that

Carl Christenson

Yes.

a big channel we So significantly with from inventory, saw bit. discussions after up down But really didn’t reduction build our I them inventories the take little think partners, again, the the they’ve they financial the crisis.

– don’t the tremendous – do areas. believe partner there’s And I place that channel, one in we to don’t I other consumed. look inventory that we needs at So our And in be some of think a that we’re amount in Mike. of was probably think, turf than the we space, But I that, saw inventory good when bit garden a question. and mentioned, little his I in asked as Jeff other reduction shape, pretty

Christian Storch

Yes.

we about On the decreased working rate inventory It’s much on DSO, modest to pretty $XX much worse. XX%. side, That’s very last a capital where of, by is – increase decline get XX% on operating saw good, capital which than thought given is the if working had we you to million. a better compare year, the fact that working revenue – in capital of going

Michael Halloran

Right.

Christian Storch

inventory. the China growth combine in requiring, you additional with then And that one, number

terms XXX days require If in very working cases. long you double business, China, your in And some capital. payment additional are it will

with very from we’re overall, capital our first sequentially the also year-over-year. performance So working pleased but quarter,

Carl Christenson

we when thing, getting little inventory. the saw pandemic up first we was we make a that sure And to Mike, tried hit, our of suppliers some and that the disruptions bit build longer with did other to supply of try with chain a

out. over XX inventories I some we’ve an to So think got to months take six next the opportunity

Michael Halloran

about paid mind free sense. a back-half – And we generation year, some good there ahead? then the solid, of you that anything for the should your cash And How on? in in more guide that using usage debt the down that flow – lot paid And might debt capital else down start of makes in Is years? think quarter. more the debt

Christian Storch

Yes.

on paid between somewhere million $XX the down loan $XXX and we’re term additional of million. second-half the So debt targeting in

Carl Christenson

is the a usually And time period second-half better than first-half. cash-generating the for us

So to down pay will be debt. every generate we essentially, penny used

Christian Storch

right flow little the We’ve with pandemic a comfortable the more situation cash from when gotten hit.

a little spend money on So some growth capital and off. projects going opportunities to we for probably we are put that some

will or loosen probably a we little the bit. it up capital expense So

So in words, we… other

Michael Halloran

Great.

Christian Storch

hard really step brakes. …we on the CapEx

we to more the initiatives do changing said, ourselves some but second-half. little not in have. for guidance We’re bit that a opcos some to growth several CapEx, got room support as And Carl

Michael Halloran

it. Thank I gentlemen. you, appreciate

Carl Christenson

Yes. Thanks, Mike.

Operator

[Operator from from Oppenheimer. Bryan Instructions] comes next question Blair Your

Your line is open.

Bryan Blair

guys. well. everyone morning, doing Good Hope is

Carl Christenson

you Bryan. morning, Bryan. too, Good Yes. are, Hope

Bryan Blair

remain the kind you helpful? compression? in that And Thank you. this guess are as out rank Of be same your more bottom order anywhere end would of you at would there of vein, any point? markets period Any call decline, nearing in prolonged I expect

Carl Christenson

okay. Sure. called mining I do I in But the few Yes, preface To time. the think. times, years all this this, nine a ago bottom I

So whatever feels like build in of towards is business and probably a take to you to say, It occur got grain the in the – the the I bottom. turf getting starts typically garden see little We’ll occurs salt. the fall. in of bit that. a Industry

see lower and hit it hope like it we can’t It we a uptick than – but have – So an as bottom, and to in into where October get oil today. orders might September, much feels gas timeframe. get is

have rig low count the an to level. stabilized seemed incredibly at So,

battling – up there. some in be going spending a six, in to agreement equipment. And traditional customers seeing we’re some our interest we’re while of kind see yet. hospitals, equipment, there the some out that starting improved oil in be interest that not our Medical ramped are maybe from they’re out, to a improve medical some movement little COVID-related bit start of between in surgery That something developmental geographic before going certainly But industry, that, some regions CapEx. months see get it’s elective non-COVID-related on haven’t are to of activities in we’ll we the to the So near-term. equipment, but XX the different

the the was I ag think – little a surprise that let’s a a we bit ag. see, business of me good quarter had in pretty to

A we’ll has the aerospace turn think a food, the And much that’s would that trucks. guess, be ag business And the starts – so don’t bit, in Class biggest whether and I the farm see we’ve news. I for business been one little good improvement while. the seen to up a the from

Christian? a and on trucks. transportation Class X turning seems be in Europe to I So anything missed significant improvement North with America

Christian Storch

Bryan Blair

if It’s color. chain supply detail. called were you impacts? Okay. quarter, But disruptions Christian, the there this in out missed other material And some helpful apologize I I any one-time-ish

Christian Storch

quarter. issues, facilities chain the that not going had in not St. our here and Mumbai we’re chain material struggled There anticipate continue some, in to there, particularly but material and to of with issues supply supply these were chain a in supply have some We overall. effect. do were to no Kitts material disruptions they We but

Bryan Blair

point, going what should positive delever last your one leverage the Okay. me, at And have about forward? rates think visibility, we XXXX? And net current demand, we even we given about as assuming, exiting should that think for flat how to

Christian Storch

Yes.

going believe current with guidance to given we’re X.X, that we at covenant a times, So of the XX a to in X.X year. that guidance flat about would we essentially we ratio now times, then leverage – we particular, year covenant at to our think months. and of perspective, end X.X and we’ll flow looking at free with cash the for the stepped end somewhere X.XX end have down between the been a maybe X.X And XX, from where

then that look So this as think a of year, early, from at any we headroom uncertainty. I want make And little point. to given that’s XXXX at too perspective. predictions for bit all the plenty don’t next we

Bryan Blair

Thanks Okay. guys. again, That’s fair.

Carl Christenson

All right. Thanks, Bryan.

Operator

over Instructions] like I’d remarks. [Operator to further the have We for no to closing Christenson Carl questions. turn call

Carl Christenson

and us for thank joining again over And time. Julian. forward your thank you, to many few everybody and months. look you weeks Thank next of you for to with Okay. I we the engaging want today,

Operator

Ladies conference participation. your Thank and call. this concludes gentlemen, for you today’s

disconnect. now may You

Altra Industrial Motion (AIMC) 24 Jul 202020 Q2 Earnings call transcript