AIMC - Earnings call transcript Q2 2021 | Altra Industrial Motion Corp

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Operator

Good day, and thank you for standing by, and welcome to the Altra Industrial Motion Q2 2021 Earnings Call [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, Mr. David Calusdian. Please go ahead.

David Calusdian

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

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

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

Carl Christenson

thank today to results. X. joining Thank review you, Slide And for our XXXX turn please to David, and QX us you

ago as on the strength demand firing vast basis end nearly have highlighting $X.XX levels. majority Altra our is on like a XXXX of on basis, only continued and share quarter all delivered markets. that results QX cylinders on business QX would earnings non-GAAP exceeded GAAP we year five of play of also capitalize Our themes a I across out $XXX to that call today's million and $X.XX start pre-COVID per outperformed XXXX. not for the revenue but to We through

of the chain manage remain portfolio our Altra. reliably products combination supply of and to ability powerful for brands deliver First, the quality diverse differentiator team's nimble, to our to has our customers continued with businesses a high and be

mid and addition automation, In top line markets, electronics near robotics metals, ag term this general mining, and later medical like strong secular as benefit cycle in and in to machinery. and equipment, assembly markets us several results, from combination positions to factory tailwinds the supporting heavy such our

Second, extremely our order incoming remains strong. rate

validates and is Altra our runway and a again belief This ahead beyond. to gives both Altra backlog was the that in quarters, XXXX long new coming for company QX a for there high guidance fact, the book-to-bill positions for to ratio and In our raise XXXX well general in market significantly our industrial all-time very XXX%. grew confidence us our further our and

progress and have execution the strategic attribute impacting world balance system. advancing business down conjunction operationally, business we teams make with priority this well despite constraints operational very is customers outstanding our our We Altra's our de-lever exceptional to and sheet. to debt Fourth, the Third, performing in chain class labor and our by supply operations. pay continued our to

to manage by future make remain progress We we leverage and range business our growth reducing continue finally, target debt we the while our our an tremendous are today, in initiatives. advancing additional within to now committed XXXX. $XXX And million

by We in businesses are verticals, level and of robotics. very medical, business across as such excited the solutions innovative happening with create development automation to customers our attractive factory

hold. of are these fact, already In we seeing many efforts take

growth customer For an compressors that significant customized example, experiencing a with stations. existing for hydrogen is highly we're developing components in fueling

years, orders environmentally several for emissions. next new receive the supporting this we vehicle Over to reduced friendly application, expect

expand our Additionally, we exposure strengthen are diligently markets. position to M&A and our that opportunities market patiently and attractive bolt-on exploring potential

Christian Slide to of performance, wanted touch an to turn details on points. through you please level X will overview of for high few but a I highlights. Now take financial QX performance our

line the reflects of and the to the strong This deliver top supply chain our year management strong. performance XX.X% production QX exceptional Our of compared seeing revenue was was markets to team's nearly to across disruptions our prior up customers. and end really all minimize X% product nearly and QX XXXX. our from we're demand

given operating that very are performance, with We pleased we two faced dynamics also this notable particularly our quarter.

process. costs are impacting The companies first several and initiatives wage ours. inflation several relates have pricing implemented manufacturing more like to we have that and increasing In in material response,

ramp QX there took even costs in existing give increases action, increases did typical increases lower the up these not QX. However, do realized though to backlog We Therefore, we cost price fully increase and the quarter. the the given offset fully through. at and through with actions from and of up in pricing in the be benefit expect the catch rapid we substantial the pricing fact customers to that notice period our a flow was lag price, is will price input regarding costs,

note related cost comparables management not on is this by that repeat year-over-year year. basis, second of point to did the performance QX operating COVID-XX, The impacted our exceptional which XXXX to in level a were

year, margins compared were up adjusted last XXXX. As XXX to XXXX non-GAAP compared a when basis points result, while margins XX by decreased basis to QX EBITDA points

market a for X Slide to review. turning Now

represents are performance up the flat across market Transportation, business and the that This to starting Altra's in China. aligns our based engine and of supplier, prospects. notably global our packaging, focus last reflecting trends line relevant heavy which be to discussions about we quarter, and applications. to basis, as our up Factory trucks, simplifying in on automation core XXXX. the represents we truck are strength deceleration revenues business, half expect automation market business specialty a leading believe with from the expectations, and approximately year and In broad we support digits over benefited on future new growth automotive we to most food broader X strong strong from the Class XX of some last braking the term that and our technology with XX% low marine XX% to mandates. transportation machinery, of up as are benefit beverage, but transportation slightly in for markets months was As and and duty world's robotics, was categories, we automation. expectations emission quarter, first Longer double to noted both safety which machinery tailwinds again factory general see were XX% specialty AGV initiatives the in in Altra's

trends digitization favorable the now had is with reflecting which ag construction, expenditures. and by well driving XXXX our term, XX% growth and strong position as remain elective in represents up capital growth, expect IoT, for the strong macro combined double all digits, board and stronger but prospects approximately up in markets robotics. in positive year secular including where on we comps in across and of COVID cycle. infrastructure remain Garden, electronics in due a growth sales, the as related markets double positive these to in the strength year-over-year of part offset of spending rebound very including trends was tailwinds industrial given in Altra's the see our was year. our ag several are in intact very which and for Turf by attractive tailwinds, also digits mid low the a full business, Longer and expectations increased favorable in surgeries global about X% segments. Our we quarter, quarter key most strong We to hospital Medical decline driven as sales ago equipment,

challenging, several secular and across all as to robotic sales, for due noninvasive Material spending growth comps year segments demographics X% related the of very us systems. this drive vertical growth are forklifts from to including COVID was a is strength exciting lifting for about to represents remain expected this and will double conveyors, which up of Although key surgeries. trends growth market term population aging long digits handling,

technology advance solid, attractive our a recovery. our improvement from defense, aerospace profile defense about encouraging remains to headwinds, is market, namely while tailwinds this entry. sales the our showed opportunity near Although commercial to by in Aerospace some market, signs of A&D warehousing up efficiency. driven is remain margin attractive warehouse anticipated single X% high exciting our has into quarter, a Despite we in low strong e-commerce barriers cyclical excited for which growth sales, by Notably, indicator to an and digits. term business of very supported this strong growth competitive with was position improving combined about business and an several

due down in represents expect at low in energy, sales, digits resulting and XXXX. of And We the order some about logistics OEMs quarter finally, rebound point issues labor to pushouts. supply market and impacting chain which continue to will was renewable in double this X% turbine

expired addition, production as their PTC the China's from experiencing in the version year last hangover of XXXX. December In surge we're induced policy

review any remains favors accelerating turn quarter position wind. for growth higher for call energy that, industry global guidance. And to as slightly expect exciting issues. renewable flat Christian Altra our the growth both to in play down provide supply the chain new of XXXX a barring with of renewables offshore or term, Longer I'll be detailed XXXX usage We increased administration to strong onshore demand and our policies to an and wind

Christian Storch

Thank good and everyone. you, morning, Carl,

and by Our a supply second it and channels input balanced sheet. were challenging flow chain resilient and a strong cost logistics quarter, inflation, strained line very performance given market. delevering highlighted cash was portfolio, and the progress balance tight top results quarter labor Operationally, Altra's very solid in

with prior review second up Organic contributing the sales points. grew a Sales line XX.X% top Turning XX.X% performance our in now of price basis the period. quarter. to compared XXX with year were

addition, businesses In imposed several surcharges.

exchange of points. had effect basis Foreign XXX rates positive a

the up XX.X%. Excluding and handling. factory strong end remained most automation the net exchange, were Garden, of segment has momentum material Turf across markets, including sales foreign effects and for Booking PTT ag,

and Class sales of to broad segment exchange foreign softening XX.X%. including transportation, growth, the once were to sales and Organic sales efforts for again same the Asia wind the primarily based farm up This automation, look China. net down segment offset revenues of by X.X%, vaccination in year. the strong with economy closer construction exchange, and last impact equipment, sales Excluding as slightly at foreign quarter Europe's grew North motors the a up factory our started world, recover. and strength and rest In Europe, of the without compared the medical In markets impact miniature Taking X to truck were of impact was markets. by up XX% America performance the the in were automation. and This into foreign partially ag factory A&S exchange without saw XX.X% began catch geography. in due

we benefits in from labor the saw we those As of that have process. taken material the we have through ahead in inflation cost flow expected, the raw actions realizing and pricing quarter, on

of In shipments. strained very and face and addition, customers market our continue a are there channels logistics those labor in constraining to operations tight

was points operating and margin was important second of the or the conditions to the Non-GAAP quarter prevail up for income year when exceptional to the noted of XX.X% was XX up support up prior points actions approximately pre-COVID quarter from $XX second reiterate due million earlier, of the prior end XX.X% million up net compared EBITDA was reflects EBITDA XXXX. and these levels strong level recognize is through from Non-GAAP XXXX. operating capital Carl an compared expect to the cost to of sales, sales basis the that Non-GAAP prior COVID-XX. when bookings. $XX.X year. as the second savings to our Working to quarter, of it operations XX We million year. up non-GAAP adjusted XX% was very pre-COVID At was $XXX.X inventory margin year. increased quarter To basis what adjusted

was of our While XX% Slide normalized closer receivables before and flow top payables. XXXX accounts our in with almost line liquidity. the look increase a sheet, turn cash basis provision on balance grew for for second Please at offset quarter line improvements, increase that in the to in by discrete income was taxes The a X accounts items.

financial serve flow model Capital from million. business quarter adjusted generative $XX Non-GAAP free the year cash resilience Our XX% totaled but the second very and cash down to XXXX. compared business continues to well. of us XX% the million, quarter the during the prior quarter expenditures our was for $X.X quarter of up

is in of of quarter We automation and to direct the leverage. in we and term the acquisition million $XX range investments of half down million to than We and the the paid A&S expect times opportunities, revolving now leverage to continue under debt the the our Net availability end of In second on million additional capital X we year an to less million. X.X of facility. target including bringing cash expenditures was increase with paydown technology quarter, ended loan, times the $XXX the quarter since credit $XXX as our growth another total at $XXX enhancements. the net

allocation capital our our continue in while top by support future to additional dividend. an leverage for quarterly Our by priorities year manage optionality $XXX growth, end, to preserve investing debt and million balance continuing reduce

investment are the growth target align in with evaluating open trends. range, that we secular increasingly attractive that leverage in we are Now Altra bolt-on to opportunities M&A

Slide to we excellent for broad turning and recovery, half tailwinds momentum right both update shareholders. excellent sense of market to patient that performance economic the diligent committed highly is Please for remain M&A in the XXXX. an into first Altra the our more financial now for competitive confidence back find we potential our based and on turn XX and outlook the our the disciplined valuations are course, to high, With and to year. Of overall a make taking have second books, an opportunities at strategic and are and half approach in

XXXX, morning's we result, a is which guidance in for our included As increasing are this full the year release.

the as $X.XX the $X.XX $XXX $XXX per for We billion; non-GAAP cost $X.XX adjusted sales the range cost range in the rate in million of that to quarter. will expect the range of $XX in diluted revised last, follows: million our before guidance of expenditures $XXX the a to $XXX for to $X.XX in to and by back as range approximately a that continue full million; and XXXX and depreciation phase diluted of million; to background, and year earnings to share to normalized the the billion XXXX flow discrete of of free range tax in third of in end to GAAP amortization $X.XX; range cash items; million. to in the million range the $XX XX% non-GAAP million $XXX million the $XXX of the of EBITDA and realized full non-GAAP is $X.XX EPS savings temporary return capital XX% to of impact With gradually in the

third quarter due provide cost The for additional our the significant was extraordinary the color of performance XXXX with the financial Let expectations temporary regarding for third quarter. reductions. me you to

than seasonality in given would While of in comps, of the our the year the difficult initiatives, be timing quarter or quarter could impact be XXXX higher we the businesses remain of expect of our prior substantially that but than business pre-covid. lower the strong earnings third quarter pricing the extremely third the and

levels I growth back two the at year-over-year higher than would challenge, And and with guidance full quarter. the in discussion turn be full fourth that the earnings expect earnings We previous will to implies to years. that, Carl. in year significantly year the quarter our third Despite return record

Carl Christenson

and is to our broad pleased year Slide please turn position beginning at with market into excellent we tailwinds several and performance believe we through extremely year. far move secular Christian, We a so remain XX. on Altra the this you, capitalize XXXX. an recovery, are based We Thank the of in to as and

to opportunities efficient executing sales the synergies, and cash model cost on premier company. a industrial includes This margins. balance to remains focus maximize leveraging priorities Our our System optimize sheet strategic and Business delever against expand Altra our our further generative business as our the in

our that we inorganically. reached line top we driving target on leverage accelerate growth, range, focus our have and both Now expect organically to

remain do to However, we intend disciplined.

strides our formed continue to and recently our materiality we with efforts, headway Finally, assessment. Diversity, making make and advancing ESG great Inclusion Committee an ESG including Equity completing

best value economic the We the advance accelerates deliver questions. as want commitment results, we'll are to very industrial the ability thank their for in on enabled our and that, our the call confident possible guidance and XXXX priorities. now new continued team maximize exceptional that world and With strategic resilience Altra beyond. up customer to has and provide XXXX deliver recovery us service in shareholders to open our for our I for

Operator

question [Operator from Instructions] Markets. Hammond from Your Jeff is first KeyBanc Capital

Jeff Hammond

thinking about just if the step backlog like think dynamic? XQ big how and at look So you just sequential PT XQ, seasonality, the kind about looks the flattish to segments orders, was A&S second of into two But sequential momentum you and between it half, up. do had the

Carl Christenson

So second A&S PTT I think expect the in will top the outperform the modestly. that line side on we half,

then quarter strength PTT China reasons but will in third year the Class side the see the side, it's the that the second the for really the decline business that Garden, side whether we low significantly fourth that sequential automation, quarter. oil X When markets I look seasonality in of fourth the help offset sales some based causes is and going be as truck recover drop of point like momentum will our and the whether and medical Turf strongly the sequentially into into so other One the think on half. and typically quarter, good in side, it's we A&S gas we is at third the to factory think on A&S, that. will and that business, broad for mining strength

Jeff Hammond

to just clear be on then And chain the dynamics. supply

So is Is about anything transitory kind some of [Technical sounds a quarter, the Difficulty] fully like right XQ or that, chain of you to catch and up. worse And particularly XQ better the getting within and biggest supply that kind then it of it? just way think is challenge challenges? XQ the within

Carl Christenson

been pops I it's have do able and some had old the been where pretty but something think the that's probably is we've whack-a-mole shortages I stable. we've And taken challenges chip the chain work that. been mean around to game it that But worst engineering work issue. supply up. with around we've so, able to the work been to

to I'd going in that's say fairly stable. hopefully, areas. some it's get So And better

it's think to chip little I better. I'm better. bit other be supply get going get really will to hopeful of the a items, some to start the for But

Jeff Hammond

zero And to more then how million corporate last to in. just maybe to and stepped what's understand sneak think bit. I'm trying And think expense, Corporate on expense to year zero and was going about going of there it seems like forward? I a kind $X a quarter, it and just one up

Carl Christenson

swing big we to any medical OpCos. underruns, in overruns a the And a cost. the corporate program there's level. So guaranteed absorb We at to cost provide, so speak, or

corporate and levels. benefit to significant as not showed savings, health have at expenses year care big a more medical last have normal year, swing So the return therefore level. you'll with This level at the OpCo up cost the

that's of You year driven has XX% have swing the quarter what year-over-year huge over a that change. second and year in here

Operator

Your from Bryan Oppenheimer. is from next question Blair

Bryan Blair

biggest very maybe for quarter. quarter, the the encouraging my highlights PTT the margin in view, was in

from QX sustainable incremental half you cost some growth on drop through in line back actions. cost Is price half, up of and continued margin catch year? actions the type second the Given top outlined, the or cost through suspect I as

Carl Christenson

the of the I look third seasonality level, some quarter, in we when half we'll here the are At the are and of in business. year, think gross at level, to they the a fourth quarter see think back I the sustainable. margin operating related mainly the in modest coming income costs So second and at the decline that probably profit the

we can second the half. I hold think those think I in a mix from here profit standpoint, gross margins,

Bryan Blair

to the second you that's quarter. favorable back going And cost projected Can in in price back the perfectly price noted price price? through quarter, half QX, and quarter to fourth second contribution to be out realization cost, understandable expected compression you parse the on narrowing

Carl Christenson

is missing can look I So how answer are points about we're much price. we price so short, to the when we way at that of XXX speak, basis

in into what And so then second we're the that's starting quarter trying late here to recover QX. and in

revenues, we're points dollar So XXX think basis be in if made… you missing over to of amount million the that's price about $XXX

Christian Storch

the we What was around quarter second got in XXX…

Carl Christenson

got we but We XXX already, another XXX… need

Christian Storch

a don't surcharge fee there's Bryan. XXX, in include then we that too that And

the So surcharge…

Carl Christenson

basis in for price we probably points basis on the points of of margin to quarter. form basis in points the XX no about But in Around surcharges. XXX surcharges There's second addition that. got XX

Bryan Blair

the to through that. of that And But then, I Carl, to wait similar anything puts not know walk for the you core some of I'm XXXX we offered time to XXXX? a anticipated high second asking provide typical for look kind just level and dynamics. be takes through perspective, half quantified and market guidance, trends on as you we could walk have here.

Carl Christenson

for amount extended get of building, is because and is obviously for encouraged we've reasons. it's more we that, because of time and so really the by are is I'm backlog the Thanks lead several some XXXX lead longer. times, orders One -- you that

they last mean what things. our local can't to handle you times of Some picture not queue look ratio book-to-bill might inside. how much if of when then the that if queue. not a managers, those at when in at front happen people on we've don't get lifetime one of the had And And of just week that they're in the have is it, really, a two related of presidents positions, you our But underlying strong. garden my really because tractor are remember afraid the and of inventory one of trying the look I many store demand I good to the is out Home I one in in of staff they're that. showed the teeny-weeny meeting XXX%, seen Depot general a OpCo at really

it So they tractors at automobiles, Look there. that inventory of aren't on kind just aren't the positions was unbelievable garden there.

just I And get very so there's think, And some a some going inventories pent-up place. go it's could to in -- back significant very, you while. demand, take

If more you look we shipping labor we be the at had supply had could chain be we significantly we more. shipping if constraints, significantly materials, and could

to think this we've is good So things to outside 'XX cause a going got to And down, -- think I happened really barring really then looks to from slow good that I prospects XXXX. our any for our beyond too projections, things projections. an too, planning March year, Bryan, talk that activities company next can we've of excited and in portfolio for about prospects our been that management working on. Day where the the we're we term internal And Investor long I'm have

really next of I'm looking So forward years. couple to the

Operator

Tiss question next BMO. from is from Joel Your

Joel Tiss

is bit challenges. same us door backlog strong, the XXXX? the versus what also And supply of your because out stuff sounds give of combination that it's it today in the backlog, you -- chain a little can the inability was to a get but what number quarter of the So is it like in of demand the is also,

little maybe just that. So shed light a on

Carl Christenson

we shipments really are you number, it's That's at year can number this the get don't constrained And but right disclose from ago. our in were love that backlog, the we would tight because more market XX% constraints supply I chain tell with a we're dealing for the just the backlog to now. where bookings, While up a us. a We point. get we ship big are labor we

Christian Storch

customer any having not significant We're issues.

customers' down We haven't lines. shut any

to supply chain, et backlog of is the the ability it also customers' of Some is because our cetera. build produce

we mouth don't in issues. pretty So customer good It's hand to any have shape. major but we're

Joel Tiss

get to visibility can a and looking million into or times the X.X%? you're X.X look or at year, we like you're highlights just paid little by under the kind before maybe probably of just really we, end you you two $XXX came dig it waiting are Are -- little year And comfortable more the down pretty the of And more to good to the feeling right that down think get end that acquisitions? attractive areas one along? where you feel if of thing of you. that And

Carl Christenson

year. of projections thing bolt-ons sense Yes, marketplace, looking we about and to balance it's going small when in the position of where some for perspective. from going end some be excited tires, The checking make doesn't I out think are sheet balance and the at definitely there at is our really the sheet discouraging that and the the to look is return a any you it me are of even what just I'm

can we're to to comes thing going little the to willing think along I right sense for metrics and at critical look remain be makes And if that So right continue crazy. on us, it. and find some something just participate. disciplined. pricing a get But we we'd But strategically we that's of the hopefully, a levels, the lofty right now, can we'll it's return little

Operator

from is Scott question next Your Rosenblatt. Graham from

Scott Rosenblatt

maybe ask first, to I wanted Carl.

of but would strength could year? that. this markets of China's statement each the And You help looks maybe I then transportation, softening if us it's a like so that more little mean, as off kind with become Europe US suggesting far like good. maybe like well. today those China the pretty you And portion, to just that size can had I'm market wondering relating -- understand certainly you improving China. a has some a is what much become bit it's I'm around of look I larger sure statements

Carl Christenson

numbers. and start, then some I'll the Christian can go in with of

produce everything and think is get very our need. market very, constraint So they customers' ability strong to there I the engines North the the American they need is to

bit. Europe. America with of a pickup constrained. they're is resolved doing is one very issues. definitely most of it think and we've by Not us, hand that little is that is nice got seen mouth supply Europe in North some very our with a We've supply issues our to But But So very, customers, chain I constrained chain well. doing And also then well.

the I size I on think China at $X.X about last probably huge year make American was year. market of mean, average. markets, million last of about China year when third look I year is a but is the the now. a in trucks in it They you a somewhere range that think what North X million,

to size what the So near declines any it it's American China to the market of able is anywhere there. offset North not is just in be

news new of in very China, is the been for prevalence standards the has good breaking the until Now us have in low place. put that engine been

the new the over environmental reasons. that want anything trucks numbers. reasons you of new for engines will to them don't next and percentage have supplemental braking Christian, I add expect on for engine years the if safety we know breaks So on and

Christian Storch

I said, terms China is about us, North market. so the -- for XX% and American revenues of is in of As

in currently their that's the very thing the markets offsetting So Difficulty] in as both here strong they, see, cyclicality important different was And China other, become seeing and America on hand, significant declines growth in has we that North China additional decline. offset extent, each very, expired, program other [Technical to has that is and to very it us. some nice about is

Scott Graham

in rate that. is second And the restocking quarter and July? were see seeing Could second talk little sales maybe orders maybe year-over-year a each dollars go wondering here. the into they benefits? comparison because hard to even assuming any of in of into progressions July and the test that you just about I'm But any, segment, wanted quarter? the for example, of I'm you the by of that just sequentially carrying litmus in how are you I faring bit to better, maybe that orders? segment, sequentially to Did maybe back that's kind incoming

Carl Christenson

we and been up really saw quarter. through order segment, what quarter has was at a picked order rate the a have and been have incoming the think the significantly I PTT for level So the strong The second second business, and stable quarter. incoming through good rates strong the and stable very been A&S

lead to decline probably new little in see we and and their a they that forth. as now people so positions should I think the gotten on based orders want build of have times the inventory a bit

see a their expectation little drop But off we drop it is we bit gets a see my haven't yet. we'll place. but drop seen in will that is expectation really my put planning a So as noticeable

Scott Graham

at And benefit on you second all the the quarter? restocking, in did

Carl Christenson

benefit… we don't think I

Scott Graham

In your particular? distribution in channel,

Carl Christenson

that in of But trying our not they're to I our the -- the build I a business think their are capacity significantly. make we channel the to inventories products, orders And sense, the get OEMs back OEMs to did But have Does some don't distributors on trying think only products and the told increasing There are higher increasing build are on. inventory inventories on The constraints. are they distributors levels. inventory because us on to not they distributors our trying of based things place. products. some partners, are little Scott? that that some build

Operator

from Mike question next Baird. Halloran is Your from

Mike Halloran

to I a clarify just want few here. things

more, that you So XXX need then price takes in tailwind it of I'm hit out thinking if the points a be the fourth lessen year, puts slight even half quarter. you but by year-over-year, of and back the and the bps XXX flatten should time realization about maybe on this profile XQ margin was basis

Is is one, other transportation, attached could you the process? some what sort the gas, those of to? thought on so And oil specifically it that and secondarily, And commodity? then are just provide surcharges,

Carl Christenson

all brakes. therefore, surcharges So and related tied copper motors the electromagnetic are and they are to

price, increases think businesses cases, probably end at and in application, That's brake ag, heavy particular. it's are very when automotive about price some I in several And Garden, then second applications, July then out with here look August. some of some probably. of and in our where in and other markets, going Turf round So

price will needs take we backlog turn. oil you to while count that through at is it flow the price see that a Now until

benefit I so fourth the pop stronger we'll think don't QX. profit that gross expect And here in will And the we actually than see third really quarter. be in up the quarter until do margins therefore,

Mike Halloran

the And the think like we forward that two variance that normalization on other and on line out? figuring go health item care of the we're full the costs. layering year-over-year basis sitting here? should Certainly on look what about as then that I year a after points, answered kind corporate And does kind understand you of expense question Jeff's then line. How get

Carl Christenson

expenses trending basis, around year $XX should $XX full be million. million to a On corporate

Mike Halloran

think forward, beyond? And you that's rate right moving run the

Carl Christenson

Yes.

Mike Halloran

question. And think kind of is and think the COVID you cost much cost way numbers of drew whatever on How last Any for what left we you can line the year terms makes normalization in down percentage, from year, is coming or back? sense? for conceptualize that about you us what same dollar then one, the as of second last perspective a half on

Carl Christenson

look that that there's think when QX QX, little million $XX about We left come will back. over combined, a at we

came was back. million quarter that Second $XX about

about the Third starts it drop quarter. fourth and then the to into is quarter same,

Mike Halloran

side of cost acquisition broadly, that an A&S the and synergy is off updates any maybe of the piece? how kind on then And on update side, the revenue just going, more

Carl Christenson

It's well. on probably going funnel million. And around there $XX opportunities the value about and think out currently pretty working in we're XXX the is we

get XXXX. that's is certainly out see very won't we'll So hope are there. that opportunities in that all next obviously, that, we But in numbers year, of my meaningful

Mike Halloran

Carl, applications what we what are to, those types tied about? And of thinking are

Carl Christenson

It's a paper was big whole We one processing There that that printing but of a and dog one and dog in and packaging. just out. bag kind raw food nice it's food in it's one, Italy. starts line humorous a of was and a landed just a another market there's material from for that comes

a variety win automated So it's for across that us. was it's a a whole And line cross-selling markets. big but of nice

Operator

Your next Franzreb from from question Sidoti. John is

John Franzreb

to third you you heard be weak talk just me Christian, fourth. the -- And that given rebound into as that is why? XXXX to I would I in will Could the quarter for transportation backlog transportation? thought say a business extends the

Christian Storch

in into firm terms agreements sequential at of well. being as low transportation point early in program China. of July. the China's contest] The in [cash These these So term drop forecasts, have the QX end backlog we the more of are long June, XXXX XXXX -- that driver are expired usually, but not is into main extend orders. does in for go place that

a And the as suggest through fourth in publicly well. so inventory China lot very forecasted the as available they and quarter. of would numbers was rebound strong work a there build for And prebuy that

Carl Christenson

of drop up and going chew of then some quarter. third the in inventories fourth kind rebound in the quarter It's to the to

Christian Storch

slightly better sequential than QX we're projecting quarter, in QX. second went to quarter, drop Fourth a compared China in the actually to be

John Franzreb

don't know hearing markets forward? I negatively on gas, lagging some What going anything the we about you and oil of hearing markets. it, around those and if And touched metals this and missed I and positive mining, are on

Carl Christenson

positive very actually nice order projects seen hadn't for And a XXXX. we mill metals got and they're in probably So mining, news. really we that ball some since

those. investment really it think been a a We nice I long has in order. been had there's time since any

And so some ramp to investment just there's up. starting

the project bit quarter so we're see get next is first work But little lagging. lead until oil is times, year. wallets until the in their sitting won't Now revenues quarter, and probably still starting gas XXXX, some we probably gas guys there. of but the uptick to seen think, an orders. We've general, on a of I longer are Oil and fourth

Christian Storch

XX% down a year-over-year, strong. in very are We business is all Texas. orders Mining own by Their mining. led up

place, in and second then and last be oil But be general industrial I to then gas. would think will that up.

Carl Christenson

you'd some on seeing going mills, we're what's in doing, is in nice those activity the steel as steel too, with expect And markets.

Operator

There Carl no CEO, the time. questions I'll at this are Christenson. further

Carl Christenson

thank engaging thank you months of time. Okay. in and the many today. for you again joining We you you. Thank And with your us to for look forward ahead,

Operator

today's for Thank you This participating. call. concludes conference

You may disconnect. now

Altra Industrial Motion (AIMC) 23 Jul 212021 Q2 Earnings call transcript