TMST - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the TimkenSteel Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. I will now turn the call over to Jennifer Beeman. ahead. go Please

Jennifer Beeman

morning conference good Communications to third TimkenSteel’s Investor Thank I’m and Jennifer XXXX call. for of Beeman, quarter Relations you, TimkenSteel. welcome Senior and Manager

is President and Financial Officer today Joining Executive Chief Tom well Chief Dunlap, Commercial. Vice Westbrooks, Vice Kris President Officer; Executive of me Executive and Terry as President; Moline, as Interim

You last night. issued release, which all should was have received a copy of our press

statements During today’s as forward-looking conference SEC. the make call, defined we by may

implied differ detail Form Our filings, a from Please on materially due actual referenced, the or Where we financial greater to I’d most XX-K the of also With projected included in to in refer may our like details and earnings additional XX-Q, included in release. list which Terry. factors, recent turn Terry? results release, GAAP Form available including TimkenSteel our information SEC in non-GAAP variety factors the all those equivalent of is that, reconciliations release. to are of to and to described and our earnings are over the website. call which yesterday’s

Terry Dunlap

Thank this you, the everyone to morning. joining for Jennifer thanks call and us on

and was onset quarter third our to TimkenSteel customers of the transition recover from The of began outbreak. as COVID-XX the one

quarter. reducing uncertainty shipments in and on we and continued the have impact includes Much so in a those to few safely, control EBITDA are many the positive the we third A During market, quarter highlights our managing working costs, that hard customers, flow, remains things cash on that we initiatives. improved, working our cash. supporting for are important and generated positive to progress however, make

all-time highlighted recordable Safety top priority, best for first of the operate remains First, the we by to months safely. nine OSHA continue year. rate our our

be work to following established maintain we've to employees COVID-XX in environment. a addition, our healthy the protocols continue diligent In

team and every to employees, collaboratively we any illness, with and staying have co-workers continue to suppliers, on operational day. sincere the focus ensure out thanks watching safe. their everyone and experienced due remains USW the we ongoing work My Fortunately, for TimkenSteel not their safe for to our shutdowns to

Second, demand actions Despite team another on disciplined as a these in most of and prior our across half excellent remains cash company they challenging generating of the operating EBITDA $X and reduction the of began over pandemic, to third prior delivered to implementation quarter million, generate schedules working operating a and and year period. second the environment, begin more adjusted customers operating flow. efforts the helped cash quarter and cash efficiency focused free management $X.X Combined, we positive EBITDA systemic initiatives, continued the capital million year. improvement the which of supporting normal million flow cost through our transitioning of of $XX.X

the the we and maintained as our During needs current we position, quarter of debt, the quarter, of $XX result to liquidity repaid sufficient cash a at meet the business. outstanding million end the of had

our positive third customers during from Moving in to shutdowns. quarter and to our as shipments recover we began markets, sales saw the related COVID end momentum

primarily driven of increased tons by sequentially, ship recovery Our market. automotive XX% the the

sales Shipments our higher than so to below the pressure truck by for OEM in aided However, and meet customers category. low, supply still our the were corresponding historically in to second light quarter pre-COVID overall are were chain the the in we especially our shipments levels during demand, business. expected the quarter vehicle automotive

for reduced resulting Real managed in SPQ particularly our weaker automotive robust slower we to were cash. see closely products As from inventory Customers saw hit. markets in as generally months expect demand the our hard customers the customers industrial a ahead. customers demand in continued result, end, and recoveries,

inventory improving but cautious, remained increases, customer buying and turns, month month sales distributors Our end have patterns. reported over

Finally, expected well-positioned remain are we reduced prices sector adjust in operations remain low under energy servicing the conditions. our drilling levels operation at and remains current to as the they continue in rigs gas market believe future. pressure with to are We natural energy customers to significant and their for as oil the market business the foreseeable align

our close always, to and accordingly. customers As and we these staying transitions are as to they continue navigate our many challenges activities align business

am focused immediate cover related reductions more on our cost we constraints, in million. long-term a our $XX and previous improvement deliver remain Beyond this target actions. statements, COVID-XX run challenges and million $XXX on in to minute. short-term will are Kris exceeding market of track I the pleased profitability performance of rate to that detail

a organizational the few cost As include, streams create A of calls, a work primary on of we reduction all in to and examples plans restructuring active during the efficiency functions quarter wide XX% activities the and dynamics cross-functional service in previous we of of longer first continued range critical reduction significantly. capital working or months are our the customers to have our these focused headcount overall we market and efficient efficient third focus XXXX. business. we across changed adjust numerous discussed virtually a XXXX nine building and teams where the never reduction continues driver These our on actions are actions more of a in more XX% product and areas and competitive areas cost are as to strength evaluation portfolio a structure. easy, beginning of The since of organization All no committed are business.

in million a customers year-end. We to improvement. result action avoidance working XXXX. changes Kent EBITDA discussed completed approximately in in to tubing savings begun consolidating administrative ongoing impact be will in of [ph]. implemented CAPEX space to per year office per We've This will addition million For in of project the near-term lines ensure example, $X year. in our product $X.X call the $XXX,XXX This of earnings result will of early this by anticipate seamless mechanical transition quarter after second being smooth our with are

similar are company, noted call, the in As sustainable all dozens of worked profitability flow generation. on being of cash goal areas with the and in our of last each projects there

focus. to line an our continues value of area In added be product components addition,

customers. a reminder, from expansion the In product launches near completed The made As tubes stage in automotive, was time I were our bars for under markets. components budget August major TimkenSteel are Dayton, industrial, highly Ohio, for and value and the with facility mentioned quarter. on engineered of and added we the qualification parts that three energy third new in these

in During product of estimate the to $XX begin million sales excess from third shipments in in quarter. fourth are large two third and $XX to XXXX, production target be to for in approximately began for the OEMs we quarter, the We customer new launches increasing XXXX. these million on shipments

for continue In this requirements line. to and identify new product to performance addition, we opportunities review application

Finally, asked I a identified. successor in to to business. can committed our performance over serving remain With of improve that Kris? like until Kris. as I'd that be role to Board Directors has current Interim as customers, continue President safely employees and the the shareholders, to my call I Chief strive and our turn Officer of Executive we the

Kristopher Westbrooks

$X.X levels thanks in continued our quarter basis business. a demand a $X.X COVID-XX improvement impact was increase million Thanks, quarter COVID-XX $X On related the ongoing EBITDA lower the lines third EBITDA the cost planned million. for shipments. the and costs declined loss of reduction an as a but EBITDA savings and due of significant performance improved an us market of levels The production the XXXX adjusted from by in adjusted Terry. third historical Adjusted of EBITDA lower quarter, actions, represented offset to of year adjusted everyone million below maintenance compared today. quarter. energy joining weak third $XX.X prior Good in the program. shutdown prior million of net with annual our benefit a our the Shipments and affect GAAP partially environment to improved Sequentially top from loss morning, driver remain quarter primary bottom the is from and and

Our the Total nine September, historically represents from inception operating activities, from liquidity, capacity with generated in million at at million. was of operating of million equivalents, credit with $XX.X the a relatively from our improved the quarter cash borrowing since of activities to company. represents of months which end Cash of balance the and the first end XXXX the of cash at $XX.X amount cash of million high generation end available September. end plus level the June $XX.X which cash we at cash Through remains June. third $XXX of record $XXX facility consistent generated cash balance our the high on a million

drivers temporary million. and part net in disruption increased third of results. third Moving quarter. the of on estimate million XX% XXXX, in to now in $XXX.X sales negative of the the market large increased the to in second of demand in significant COVID-XX sales Net due automotive the following the impact quarter second quarter was quarter in outages the the $XX approximately plant COVID-XX We quarter

continued quarter market. and with third million to in an of quarter were shipments market The billet were impacted increase to year improvement result is Shipments shipments, that demand quarter, basis. tons the raw future. XX,XXX mix. industrial as automotive billet automotive Additionally, more items energy a were of perspective, ton the in to in shipments drove sales XXX,XXX discussed $X impacted impact negatively net expected third Lower Shipments remain This XX,XXX sequential shortly. third energy in the sequentially offset the OCTG which were quarter other quarter. shipments sequential XXXX. million compared offset of sequentially prior prevail the decline $X on were and energy industrial EBITDA with by adjusted with markets, partially lower shipments. lower quarter. material XX% of the be tons to energy to in unfavorable and declined higher of XXX% lower primarily an XX% surcharge a sequential by in to end from a and the second revenue Price automotive both oil of of OCTG by second of slightly gas minimal as average an are pricing and tons increased quarter on than and index third to quarter quarter X,XXX industrial per approximately weak impact volume the modest in a by customers below the EBITDA compared in quarter, approximately the was to of foreseeable adjusted due negatively From higher the third higher the tons shipments

XX% increased result quarter. unfavorable related to commitment costs third in utilization a to third completion the maintenance in quarter from schedules costs partially million maintaining leverage. of production the annual to prior operating $X.X due the as decreased manufacturing as by plan shutdown from schedules flexible $X.X primarily lower aided planned a million year to improved demand savings the expense anticipated, increase SG&A quarter, by prior improves manufacturing $X aggressive on quarter. due We of align delivery. by at $X As our customer our Melt the with remain for our actions. continue $XX.X quarter, savings of result third million, time sequentially the sequentially, comparison actions. largely In sequentially offset an but to SG&A by expense quarter million, cost was reduction while restructuring third near-term from actions million low cost of fixed COVID-XX to year successful

nearly which cash represents at XXXX. the our the of total available million liquidity an was $XXX Moving XXXX, end of quarter million and third end on since the improvement of liquidity, of $XX to

free During the of flow million of cash company generated the million repaid $XX.X borrowings. $XX third and quarter, outstanding

month zero earlier to the outstanding repaid on we on the in $XX the million borrowings the of for of Additionally, facility remaining credit the bring the company. time first facility to balance this history

former sale proceeds addition of we've Houston, cash real cash make We quarter located of machinery of our non-core million cash the Year-to-date additional in upon assets remaining the and the equipment to with $X.X to ongoing $XX sale. assets Texas. in In from and third with facility assets. million continued the for estate of during non-core totaled proceeds sale free sale positive flow, progress received

principal will Our June million amount $XX.X XXXX. with of on the X, convertible debt mature

advance continue to triggered remains markets liquidity the capital the We plan its and in maturity. end Overall, to sufficient or of our address business. of of opportunistically to pension at at the the options perspective, believe position exist meet current a the monitor September this the needs the from From in debt convertible re-measurement recorded excluded company plan $X of adjusted which has non-cash the in pension The XXXX, obligations a of gain million was year. of quarter third first U.S. quarterly assets ongoing XXXX salary the EBITDA. and re-measurement been in quarter of

million. reduced and cash cash implementation approximately in at on saved as $X required quarter, of company of U.S. commenced the cutting plans funded $X status in XX, the XXXX. the was that all top pension the cost quarter, XXXX, prior pension third consistent post-employment Following of in and In we reduction pension our COVID-XX total second actions COVID-XX September actions. reduced and the approximately by with in the since expenses quarter. quarter the in There million in approximately of related to our related salary actions Last expenses implemented XX% the additional cost gears million. in actions plan required total, $X walked administrative the XXXX COVID-XX $XX approximately and variety re-measurements actions benefit third approximately saved contributions related of XXXX, of I Switching a quarter million are no minimal XXXX. In pandemic you onset the contributions by ongoing through administrative

last million $X As deferrals at tax defer quarter quarter, payroll the to payroll XXXX company Act. and $X as in be will by remitted its to well. additional be an in end two the September, share taxes Social XXXX. million the discussed to continues deferred the Payroll installments $X.X of expects fourth the company of deferred equal Through million Security taxes as end of afforded the of and CARES

early these of estimates review was us where in XXXX. current savings applicable related we cost have In in adjustments included savings previously with and program recently COVID-XX overall This that levels. savings addition to validation executed that actions a XXXX provided detailed volume to initiated reduction of the completed review projects our XXXX, for

on beginning the relate of million reduction half savings million. of $XXX permanent our XX% in As pace target hourly in to employees Terry rate we're and noted deliver rate to XXXX. we're of run over savings XXXX, $XX the pleased of that to previous report salary run exceeding a Approximately since

contributed of closely approximately savings, are will Houston, the to Texas our $XX going in efficiency and variety our Additionally, of such retiree annual in forward. significant resulted savings that approximately million market offerings dollars programs benefit rate more continuous operational to $XXX items include actions to changes $X of savings, initiatives a with expected that result million of benchmarks run facility and benefit employee closure improvement align manufacturing annual of million to the as the which over former in

flow long-term impact As we this Terry nearing been time, given and reduction updates that are exist or believe and profitability provide of in going us people long generation were this actions actions flexibility of the providing mentioned, of appropriate short as simplification improve future but strategies. with cash TimkenSteel. summary, highlight the we made plan many they we to savings forward. not forward program incremental XXXX. our execute target we do to will exceeded liquidity consistent believe improvement We easily, and for these the new completed. profitability on to going necessary competitiveness as additional term end and improvement cost has significant structure not report to our Instead, look opportunities In forward the and At and cost substantial

up my the the continued This not questions. up call like guidance in volatility and time. at wraps earnings we to we end Given quarterly and uncertainty would remarks open our are prepared markets, providing for this

Operator

[Operator Instructions].

today proceed Rosenfeld question question. with with line first Exane comes Seth Our your the Please from of BNP.

Seth Rosenfeld

side Good couple you may. please the today. different have starting if of I taking on Thank questions for morning. I questions our out demand a

will value customer stable are industrial back on on the shipment season. into the think maybe in that the align to that through also dynamics boost little your can expectations were results what within struck add the might industrial holding your start bit volumes, base will new walk for there, some cautious we demand I at have more autos a extent components, what If your a of from sequentially? in as me commentary to seems please. we us than be looking what heard your customer commentary peers I growth shipment Your base, drive with many you QX, peers, of more they and

Terry Dunlap

Seth. Great, good morning

was comments the been to as But as we Other line Tom equipment space So was space where And I'll will. very industrial few you've for in Moline. back in everyone, automotive robust. difficult us, still as activities pretty in where heard robust I you noted the make more and much The muted. nearly from very were for. balanced defense remarks. But market has had a the as business were was and we hand strong earlier off industrial we're came The with large area not rail then if year. very in others hoped good my

you comments Tom So, there, please? few a to want add

Tom Moline

is some and state XX% see applications. industrial pipe But earlier good in result This mandated energy. Tom little in even relative operate industrial with But, equipment supporting year, COVID-XX continued Moline. to are most excavation color select certainly that supporting XX% the earthmoving customers being morning. quarter, of were the with oil QX foraging the group any in rail a on so the I'll somewhat certainly modestly somewhat particular, modest Yeah, the to disruptions add specifically also to restrictions. deeper, we markets were side our relative of on But the within pandemic. declines industrial a to the down as gas side the all market some or markets and in general of range and did

inventory be good customer what condition. that now we quantify, X% saw the customers a taking center buying industry. at volumes historical quarter In our relative changing cancellations rates, channel And the really in out one from in are relative a generally of bit, subsided order in to earlier of orders only most our increase times XX% to all. seeing on industrial continue although to replacement short and to at have in dates right been driven advantage by service were effect year. shipping significant Order of approximate align requests within is down to placing Initially, There's we're the inventories are no that at about but their modest, approximately push well to speculative present book manage pandemic. last and was small going demand, the specifically Now, distributors, to customers has reported quantities. material with the lead levels. we half difficult And their the COVID-XX

it that agriculture, industrial; some agriculture a the pandemic, beginning gen within solid mining, actually shown mining levels all So, industrial power through amongst relatively something... cautious from look quantities. show the are retracted, to Israel. the energy industrial to accounts, lot strength. also book to And is Terry to can making there industrial of markets to and resiliency our and and have that offer industrial continue albeit perspective, stable the a we into still there position difficult at appears continue, smaller distributors submarkets have defense large and is regard are But machinery, forecast. moving while Wind the and uncertainty And with decline submarket you booking and some I with is as orders, the be in with COVID-XX in still within if optimism but a QX. one good election to mentioned, you real is at improving order

Seth Rosenfeld

wasn't for view Guys, group? this if opportunity sequential further for across that to volumes the you QX growth can happened -- something a

Terry Dunlap

QX I going of look with seasonality like general because much think some improvements into QX QX. will just

Seth Rosenfeld

you the congrats as and Do kind that performance I and can XXXX you. what's wondering you demand excellent discussed question, improving can to saw management generation. past QX, cash in thank we've in on clear, Obviously if ask certainly it's forward to very continuing we structural talk have of measures if see And for working working drive a stage? seems happening or be further QX volumes please, that. release to into through on a to the That's higher. going on capital capital off into us I so continuing really execute separate

Kristopher Westbrooks

examples. we've still goods for as are do Good morning inventory us Seth, certain forward. before, capital working going we can pockets certain a remains focus that of significant is optimize, talked and example, finished this about Kris. Clearly, supplies there as categories for believe We of

an However, and in to take fruit optimization inventory low lowest already. the receivables is the our those and payables matched. company. point we of do actually somewhat the of a very lot demand be have the addressed QX time we those perspective in history perspective and future of hanging from follow expect From

are cash been nine believe generation of to they'll believe larger, do benefit said, dependent we continue, they have and us from a we've very going months forward, be because all and process be impactful overall, more last completed perspective we respect implemented improvements one tactics working it's those forward. and going from going are That those those to strong have systemic, So less a the going demand on then will capital EBITDA lot we the items. significant generation

Seth Rosenfeld

very much. there. I'll you it Thank leave

Kristopher Westbrooks

You are welcome.

Operator

line of Cowen. comes question question. next the from proceed Please your with Tyler Kenyon Your with

Tyler Kenyon

thank Hey, Good everyone. morning you.

Terry Dunlap

Good morning, Tyler.

Tyler Kenyon

morning. Terry prepared those? could I talk wondering you broader in referenced to little -- Terry good constraints. I some remarks about a bit you operating more if think was your

Terry Dunlap

your Operating question that Tyler. constraints, is

Tyler Kenyon

a you seeing more? the market with just are were you Yes, so that in to if what referring could expand as customers the I upon out more think you yeah, bit but

Terry Dunlap

very yeah. demand it's Oh, It's customer right. It's the side. based, --

our plants we're capacities in lead nicely, operationally, really running shape short. where good keeping So managing running times things are well, well, our are

the good. operating on So side, quite

it. where went won't are, It's three so you Tom last That's it. for the through is a I demand that went repeat heard word pretty better concerns Tom activities all level and been has other The all endlessly On that clear. months. about have the uncertainty it a if just uncertainty of will. read We've just you the Automotive side, about through the it in for it.

experts all a at and and gas in gas that I So very natural know energy, level in continue, expects I business. the the that's low to think it's everyone any oil and

constrained. mention the operationally opposed really we as to constraints when market it's constraint So

Tyler Kenyon

it. Got

levers Okay, of Kris, a you now thanks fourth EBITDA help us moving just thinking material perhaps to XQ. view we major from you you for Would a with the should expect took $X bit stalling that. lower spreads raw quarter trajectory and from of be could on the reduction offsets costs quarter the million for some some here Have from XQ about tailwind to and coming in how initiatives? the that cost maintenance maybe third then again potential those and bridge. back

Kristopher Westbrooks

morning. we manufacturing Sure to think that X QX, QX Tyler, additional good When about that annual is versus shutdown maintenance experienced two million maintenance. of the we about in thirds of related costs annual

not that X So million. the all of is in

on So no half facility. It's our one customers. come we There that to need perspective. that disruption the Faircrest cost going a go has from to business, million, at planned to piece quarter of plan a there ship do -- months, we will will here outage that This that of be maintenance in away. focused There we half at be we would that to about do work about is been of are will expense. the fourth to the is for obviously required some $X.X continue CAPEX,

some quarter we spread of that, are important mentioned prices in year. us time for the perspective, as the typically from seen that had that's do at we scrap fairly a don't Terry stable though. action So fourth that contraction, an Besides

unless anything or and walk from have a puts to So takes really perspective add. to I Tommy can't through quarter any major of Terry other fourth think

Terry Dunlap

material think spreads I pretty mentioned Tyler, the the been you stable. things have specifically, spread, raw in No,

everyone from are big when talk it in the really about they hear You scrap guys else business. they the

uncertain compression stable. quarter been the the from some for relatively it second stayed everyone. was when quite has There it spreads So on time

from this actually pretty material my So stabilized perspective front. the raw on think nicely

Tyler Kenyon

to third with from do how into the And initiatives, think respect the proportion what million the left we moving lastly, realized of these fourth $XXX first reduction just Thank savings you. some realized and quarter of what's and cost to you've the should of of run here about pace you target think kind new be into XXXX? the half rate in

Kristopher Westbrooks

all very reduction, remarks, Yeah we've Tyler, opportunity this taken that comfortable we feel review in that so over later $XXX be to will million in year related and we've prepared There my year to pace will cost some to deliver mentioned savings. of on the I the that we as from continue into taken of reductions actions are that there in the get was XXXX. challenging we've from of those benefit low incremental see that. an EBITDA to will it's volume over that's But headcount see numbers. at you to levels the coming our all all know savings in I as of half our perspective. provide and it a the level and But taken

those up our in figures you'll see year So savings strong. we're wrapping and the

Operator

line Markets. of And next comes Gibbs KeyBanc from your with with the Phil question Capital Please proceed your question.

Philip Gibbs

Hey, good me. morning. you hear Can

you And consistent then comments, I third could towards end your reasonably with said quarter. missed? volumes made comment some the after missed said you I be of what that Tom, had Okay, great. you that the

Tom Moline

calendar of some seasonality general the the in would With modest year. course expected that be

Philip Gibbs

The seasonality…

Terry Dunlap

The tight, right. We're as lead still booking the fourth are quarter, mentioned. Tom times very

we the -- So on have. quarter we we're have, everything every fourth booking we're product still still

So going there, that's we'll to will. weeks uncertainty lot look. But more know if of a ahead you in how the

Philip Gibbs

so you're is Okay, normal I QX, that saying take seasonality for what should away?

Terry Dunlap

I Yes, be believe true. to that

Philip Gibbs

readiness look, and of in the quarter, the some through ramp, as get out look are balance you side fourth to rates the first to customers going did spots? the I secured because, what needed all and production obviously auto the on the telling probably and the and specifically, you clearly they to inventory Okay, months in into your a states guess six then to terms you the material this, are they quarter, third three next snapback so have but them quarter have way trying up,

Tom Moline

Demand here --

Terry Dunlap

around continues -- There's suppliers much be as demand let some is very good. maybe that little get people and for too or there's to very demand grab have and they're pool's It Tom, The there's have for appears choppiness. that start. adjusting next year with with things too moving good. The Phil some that me on that. doubt, one no movement

definitely seems So, it The the very all them chain really -- every to fast Stresses one in are forced very good side supply to all the event, a way overarching the get were read back of things. one auto you everybody's they Mexico it's supply overall, and demand main out a can't their had it about We're have and make choppiness has quarter. very good full it difficult some But get to with settled of Other that. them dealing plants, SUVs. and enough. where strong, with to the with hard day, side, on in a first are good some the on the with supply strong down track are but the chain chain. move Very, right issues bit. on of especially mean, I there trucks but the in signals working pickup producers in Phil. that

Philip Gibbs

the going this a psychology, of Terry, metals, terms of how it decipher a election psychology chain tough while you've I guess, been playing seeing spending? metals into but doing factor a and been in is in capital to on, for that's know CAPEX restraining people general bunch be you else and given think I everything Presidential you've terms elections. of supply might

Terry Dunlap

it's life. to see are are ones each is that I over think and bad can views the gas fuel. folks given differing get as just has would fossil wait group as till their happens, oil can't what the with in waiting just on they particular everyone so it the say on I

could be whole happens. So I'm see worse, not it but a we'll what sure lot how

I away. can to what are days go. is four their will On we're -- And side, be think through the wait back just everyone know it I and people CAPEX cautious. plan to trying their to business. happy to can't plan five it, just direction going to say get And to would only plan They lives get they their

to I watch going better we and you, out So a I find Bloomberg for CNBC had and happen. can wish all but what's answer

Philip Gibbs

the going election so was next I outcome decided of to assuming week, another that’s that's thing? the say is

Terry Dunlap

matter. yeah, that's -- that's think I another

Philip Gibbs

Alright, very thanks much.

Terry Dunlap

Alright, Phil. thanks

Operator

[Operator Instructions].

question. your Please Kitzinger with Advisors. question Your next of from the line with KLCM Jim comes proceed

Jim Kitzinger

some in kind how there couple QX, a be to a are there? cost EBITDA to are more you to I blah. of wise trying to the and was the third assuming do or how from in quarterly I'm and savings you grades up down trying was you A get than wise a million and that I'm quarter, comment at or in have some to structure you you number objective $XX rolling $XX questions. richer if manufacturing in competitors of appears we cycle, point I your changed generate profitability to the questions, you because, Where would million you in, relative staunched build you're I'd Help So think doing be at are broad a mix viable there views. QX, to what real mix but give that the of that's couldn't mean, do you've do up in years a Tyler at others blah, you share but also relative do this a to a of me color look couple the going market show lot volumes with much price cheaper morning. $XX this, and of standpoint, some or the looking so Good you business incremental at that would made blah, were rate be some were interested ago, at million ex-COVID. some question cycle? have bleeding a guess in I I'm the operating longer-term you revenues guys model mix, And is the like interested feel somewhat forward, should some better it Phil

Terry Dunlap

Less try be the on get better. to end SPQ sure baton our off, think and we of do here. again. going seems pretty get But, them Kris. go the perfect that market Okay front a all. think, little we to imports hand sources we it's continues not a from to gotten I seamless thing. that mechanical sources. forward on the Imperfect we But good variety good. on but that think as to then tube be data, external one a We least on has at front the what for Terry to front, Again, I'll share actually that from latest I I'm data get have, information. market share Jim, the bit question, it

can. been as if time, certainly end we've for a market up much best our our as high company to very done grow far efforts. chain we the on energy because really the product As is the good that the absolutely. mix the mix to to value business thing long help is defense the the a energy in a of dramatic value The Trying followed The sector, has value move not work does for you given goes chain. And energy continue high us. in declines the that overall

to in important with were to really So that this the hoping area doing. they're that's that's continuing that have business And going been we customers work grow continue looking continue very that And ahead. to hard and year. very the work we to we're our successful

value go So, but Energy's time we front, side specialty of to in short chain. up period that mix more amount on better of we the we're overcome manage how do working do. and the on much else in how products spend monetize the one on it's things we of we it the business lot it not we're that, everybody a to to and And spent continue How again. of the whether we how that. to services do more work tremendous wants to very going more the time efficiently, capital or year tough efficiently, to price working we doing also we want efficiently, our last hard a of make a time at do do a

time a better and it's flip of area been can a can't lot that in You spending all tell on get that week. I you, switch But many a an we've make months. for

On few the if reiterate to about Kris the talked I'm you some you you going that take can, cost of ago. minutes one side a just things let to

Kristopher Westbrooks

parts There's really Jim. there, absolutely. to your two question Yeah,

will track the savings million to that a looks million, is EBITDA I from sales XX% impact $XXX the of not at what perspective, like we're and time. this COVID what on about and the is that First, going share relates to they're structural. that approximately to over But XX% all actions on to volume, related are us volume calculated and and it's not It's achieve at behind lower we're today's is levels. of that to related $XXX variable but to pro forma savings the volume.

perspective, I as my an opportunity. from view So upside that

the being those have of in savings in continue with recovers But see develop. savings those future, volume we and those delivered to As XXXX, structural. on XX% to grow you'll

Terry Dunlap

the last in was the I EBITDA I third the in bodes think environment, the was from Jim, volume aspiring model, historical positive quarter generate well when volume benefit would the to have we're and business. the not added question to given does like. just is it And business I cash to added structural volume volume, is the clearly but start come what thirds will you be that perspective mentioned, and Kris still say do, think how low we across it that volume And it it, That cost from will XX% the two back. systemic, will out, stripped on the leverage something will be as if of of and

we a model us last that so better giving keep new orders it that, in making with hard have for hard to structure the want put we And taken their the year. place making like our over them. keep amount of focus tremendous we is. they we've our work And that's keep products of have will we So at where the sure to and been can care customers really have to I and working think cost to

Jim Kitzinger

think operating point. okay, as appreciate hopefully it But about business a think very the does see get investors that that at affect at it. that done that. like to as I in metrics and heroic I a an this companies cyclical mean, where return My I'm to is owned there cash gets XX% generation volume, the up But and XX% again, understanding is deep of forward, cycle that. look some you I This structure profitability pleased long does this companies working be cyclical begin cost changed model it across markets? here, and if also I for look like can't next these is, time. now get last to the we these about is mean, two I it question of business, they end you've so work flow I cycle. a with when viewpoint mean, can move we I a has over like up a what was dramatically And understand comes everyone Alright, with once volumes the the all mean, you volume as we've low broader capital the want are would the though this looks over but I what years. which to hold going back, cycles, investors a business get what bad trying a model down from not like understand

Terry Dunlap

the do Well, come we the critical and well really, and really we crystal will think right I a and know where which But you. of worst markets serve Jim this think when back. us for well today downtimes, are I those in business a in had questions, wish is absolutely serve cost great is like us we I are better that structure ball getting the

but to don't or quite XXXX, we're next to while. a So in any for have we're I I XXXX the knows. think or XXXX if time so But year who know see wish, a going I going

in asset to cost So, and compete then worst what we much we and that really to cost best care of the times others we competitive every the It much special we place, EBITDA cost to stripping of the volume have structure and the day. on for wise, be do in focus times. to have the that that cash stuff be up to do, the position just as leverage that out face clean don't guys a possible about as bigger across continue this same of paid in and it generate with

goal, our mission, do. that's and striving that's So what to our that's we're

Jim Kitzinger

have you secondly, likes topics? the both relative like you're the what do of competitive? had their place, Terry, or are throw get follow-ups, one costs, in from no here the you in you ring on to to to a higher structure to competitors, where where Board chosen XX%, run XX%, big you I are I'd those two do thoughts X% And obviously your think is cost then to some be hat doing standpoint

Terry Dunlap

can compete be every to closed. do don't cost But fixed to about the talk people focused and about those all structure. anybody. to front and with, we're working around sure know that. about everybody details the usually have we with you on have we you compete the you the cost get And operationally a time the and talk keep what getting we structure think on gaps we when we on to Well, And

I've able be As I the moment. here have the worked something on to the posted that ahead. say I hard I me far it job that you. can to goes has about for moving foreseeable could but me at been the you successor And Board in found tell for expand as my about asked we is than you tell to forward weeks we wish do when what this months my until that's the and more we'll we've will keep to to XX and on keep months, company future continue and

Operator

And call Beeman. Instructions]. no there back [Operator questions further I in are Jennifer queue. turn the to

Jennifer Beeman

everyone you that thank us concludes our morning. and for Amy this call and you Thank joining today

Operator

you call. Thank This your conference for concludes today's participation.

disconnect. now may You

Metallus (MTUS) 30 Oct 202020 Q3 Earnings call transcript