UFAB - Earnings call transcript Q4 2019 | Unique Fabricating, Inc.

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Operator

Greetings and welcome to the Unique Fabricating Fourth Quarter and Year-End 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]

It is now my pleasure to introduce your host, Rob Fink of FNK IR. you. Thank

begin. may You

Rob Fink

Executive I'd XXXX welcome the earnings Cain, and is operator. Fabricating’s call to fourth Doug Chief President Fabricating's quarter conference Unique like you, everyone to Unique today Officer. Thank call. Hosting

Before risks will to discussed everyone like Doug, of remind Litigation statements forward-looking that the and as I subject conference the that XXXX call Reform Private call Securities turn this to I'd over on uncertainties. include matters to defined are in Act

future to other or performance events call. by implied cause or future to to relate different any risks on of and made statements known statements be involve uncertainties the levels from performance unknown achievement achievements future factors financial expressed and performance results, Forward-looking today's and may or results, or activities, materially activity, Company's levels and actual that of

differ All expectations present and uncertainties may on cause such actual risk uncertainties by include risks and but and are report to from limited based statements annual outcome in factors, forward-looking the which be to pursuant certain particular, in such with statements. that materially management's results, These those expressed are subject performance to discussed XXX(b) XX-K the ended Rule Form XX, and the to those Factors. will filed the Company's titled section XXXX, Risk SEC, not December for are period on

intend release this All not in this as update made are press today, unless and of statements Unique required morning's call does to on this by information, and Fabricating including law.

Unless decision, results evaluate Company's are to measures Full the performance. earlier financial used useful management a discussed the call. non-GAAP core included presentation for will current measures are that press be These release should and these of this assumed ongoing certain future Management issued investors by non-GAAP non-GAAP understanding this future. GAAP that in reconciliations is and non-GAAP financial on strategic non-GAAP make any of the basis. financial in financials operation In stated, was and be will to it otherwise Company’s believes call it during assessing discussed addition, are the to prospects measures the forecast be in today.

that call like now the Doug, yours. I'd is all to call to the Doug. With said, turn

Doug Cain

Rob. Thanks,

like continue the a outbreak’s impacts on Due ongoing coronavirus suppliers our while to COVID-XX we we to actions would concerning resources term our customers, are a our with prudently and our with Company, I near, longer executing customers the keeping brief industries commentary comprehensive set to effect First, to manage mid require. provide products they Company. the supplied outbreak, serve, its uncertain on and the the the of

While in and automotive to we indeterminate operating been demand the all across continue have an we orders facilities. our reduced plants. our in customer are of period, for various our has segment Currently, markets

the the and the our to following employees. guidelines measures We ordering limiting material count, current in are raw modifying entities schedules employee various are Considering spending. where provided protect our we governmental our all are jurisdictions decline operate and demand, by restricting plant we additional discretionary in and shift the taking

chain. exclusively almost our not North is base American, supply seen have in disruptions our As supply we yet

to Due of on governments, actions situation our the COVID-XX to situation of the of rapidly and the by the operations. the various are inherent customers evolving including the taken we uncertainty unprecedented unable future impact duration the and full determine

the to business. our progress have we Now, I made will with shift

Boldly fulfilling Fabricating, the first vision months beliefs in joining my six that we earnings that formed I Back at in hiring Unique call. are first confirm our week since I outlined Track on the Company process my In my the during

all we to made in improve passionate the and all what in do of organization overall foundation I places to the Boldly we everything to pride of instill and improving necessary at Back duplicative involves do, on Track culture the underway. is the have enable we forward a and now challenge changes a process, dramatic our carefully eliminating every a the We expenses momentum culture. or wasteful work. and revitalizing This looking

we operational ambitious urgency, targets of changes growth the executing sense sustainably focused improvement, and organizational the that collaboratively achieve and set. are to cultural, for reduction debt a we With sales EBITDA

We and continue forth. to Board actions undertaken the team have direction full support the management set for and

to November spoke Since Georgia Louisville, facilities. Evansville, and with I final the facility’s last of closure our Indiana we in of end of completed Kentucky moves with you and our as production the XXXX, LaFayette,

We XXXX. our in March by manufacturing facility closure to the Ohio the have been end at operations down complete of winding Bryan, and expect

We and the in to Bryan have facility production our Mexico operations moved from Georgia.

recognized As and in year. zero related we facility’s Evansville, last to of million a during compared $X.X an of result activities, The quarter the $X.X payments another of our period charges Indiana charge of XXXX lease costs. closure to fourth corresponding various million incurred restructuring other million from future these the $X.X

anticipate $X.X do closure. We additional million for of Ohio restructuring Bryan, quarter of finalize plant to in million first We Bryan plant incurred the severance in also our cost an the charges XXXX $X.X one-time closure.

Evansville approximately The for warehouse which we for one building through includes real with of facility XXXX under November are the owned lease payments $X.X and to operations one sale estate related million. future lease of listed that is

the to facilities. and We assist subleasing have firm the sale the engaged a third-party of with

align expected our decisions are closures first quarter and better the these approximately customer provide capacity annualized these to demand of with XXXX. are ramping While savings, costs plant from up $X.X never easy, million

including resources human organization, From simplified the the level. we and executive realigned perspective, a

resources value a quickly respond create Our this effort of to business organization conditions. market the better optimize eliminate were ultimately and agile and layers changing that reduce needs customer to, can more goals in redundancies; to first, to position third, second, management; to

eliminated additional we quarter the salaried positions. During of an fourth XXXX, XX

the committed during the our As part and XXXX, leadership U.S. Canada XX incorporates investment first a associates which of in our development comprehensive program half to we locations. of team, across

industry of and both Tom Resources, extensive Yaldo quarter the of Lisa Charnley, new added of Purchasing, first with directors During experience. functional XXXX, we Human and

facilitate Director this promotion quarter, to second for activities Stokes Engineering, of our commercial internal critical Board also our of area Tyler very the We Director the In position, will IT. and an to new we business. bringing on be Materials made of

As remains to next search in filling remain license leadership asset. CFO position interim continue CFO key the the completing period, executive a I active continued. our role where has team, CPA step that the serve and in In experience my an

increase heavy medical growth, the and gains, market the to a continued development, aspect ambitious new through aerospace November our share the expansion targets, product markets. revenues have and and revenue With truck, outlined return of meeting critical approach to of in materials we the

business. sales over decisions closures we as where years, to well last was the awarded We or the plant decontented have customer from impacts as overcome the two not new on programs, for the product successor were negative our

we diverse materials our During advantages the manufacturing in strengthening diverse and geographical very have the communicating with last active processes our including relationships customer footprint, base, months, flexibility. been our competitive clearly while

We confirmed few locations in on limited, technological years have that material sufficient over share suppliers serve, with significant grow our the increased processes. to enhancements have in value the that expenditures our organically. remain we confirmed automation, capacity market largest of one the and targeted We grow to opportunities for for improved focused we and markets we next manufacturing us added capital utilization, our exists scrap our revenue reducing increased

business soon to the realignment longer of be additions We a grow our manager strategic to in completed our supplier as further Mexico on Mexico support the organization, the term refocusing develop of senior relationships. commercial Director offerings as and Board, and and including well of Material sales to enhance Engineering, our product to

existing among additions will these in others our create that confident and unique the are truck, our medical We in us enable while heavy and aerospace. markets, expanding communicate selling points to

customer to aspects of we facilitate the our quarter implementation our of relationship tool, During management commercial first activities. all of initiated force, sales XXXX, our

targeted In with suppliers. addition, pursuing raw leading technical we material are actively collaborations

effectively and processing been rapidly support in and the During requests products masks areas, and other to shields we've to healthcare protective last week, medical able multiple face items. value-added manufacture for among the and

infotainment. advanced vehicle North resources interior light-weighting, with cabin capabilities strong opportunities products, renewed vehicle, service from content to production, strategies We vehicle component for geographical sourcing and provide reduction opportunities and trends increased customer achieve market North improved American many believe where solution-oriented customer emphasis in pursue per presence our us on comfort a with and and with engineering, Our manufacturing our shifts technology, support products telematics create us for American evolving the to these new noise geographic and combined share gains production.

in foam air million new have and utilizing business annual been with life-of-program winning recent in and of We $X.X million in an cabin $X.X sales TwinShape XXXX a our successful value August reduction SOP areas or value. noise weight an duct including solution, these

and water are a in leading the components provider we of automotive, fabricated industries. heater HVAC Beyond non-metallic appliance,

insulation, packaging, solutions primarily gasketing, used reduction, of water vibration noise products deflection, consist control. and Our seals, heat in component

activities business opportunities in believe to also this have customer there are and we this we our market, support segment. in refocused As many grow engineering

With engineering, sheer manufacturing our will in that purchasing, we growth I’m our achieve resources, confident in strength markets. program of and management each human commercial, capabilities,

functional improvement to Independent of next performance substantial the are each the locations comprehensive generate we of have plans impact developed that for income savings, detailed, over areas our plant positive closure quarters. and expected operating

opportunities across in capacity, underutilized costs extract and overall previous the from of reducing best practice the synergies improving on enterprise. acquisitions capitalizing to knowledge filling now manufacturing sharing are processes, We logistics areas

levels our several of another we debt are lever As condition. executing key while our improving reduce performance, financial improving operational activities overall to high-cost

on Back Boldly Track. is truly Fabricating Unique Today,

new our and and are and winning and flow our our empowered, business, are improving employees happy. reducing customers debt We are cash profitability engaged while

overview I our financial will results. now provide an fourth quarter of

the our quarter impact you our profitability. a As from results, can meaningful reduction are see fourth efforts cost on having

For charges the fourth of income inclusive quarter, net restructuring

compared our despite improve the the $X.X our of is loss in XXXX. to lower direct net actions quarter operations, debt. took was we a and of cost $X.X improvement result of This a million, to reduce carrying overhead of cost decisive structure, the sales fourth million lower

$XX.X to $XX.X improved an by earnings of receivable December to XX, $X.X XXXX, and million $XX.X September increase XXXX of as as in reduced inventory Company from capital operating due and debt million XX, management. Total and of XX, of accounts cash XXXX, million working the generated compared million December to usage utilized as decreased as

three sales $X.X to decrease of same quarter for for did during product included cancellations, million, Company the down the The million end-of-life major platform win customers or of $XX.X period program Net loss the eliminating year. decreased plus the related $XX.X on several business $X.X a not change, XX, million the last the the sales XXXX where December to the platform. or net made platforms, ended million successor from XX.X% Company's customer

conditioning sales also Fort discontinued customers. Arkansas Smith, We to and million $X.X general air and million in industry from and closures of loss a of Indiana loss production Evansville, net a a the with volumes $X.X due sales in combination experienced decline several a work major plant

million $XX.X net the fourth was XX% industrial was the of automotive for the and Of represented total, in X% sales other quarter, X%.

sales Gross loss $X.X profit sales partially was the net contribution to in XX.X% revenues XX.X% XXXX net the of corresponding the and decrease offset cost. was million, fourth resulting million, to primarily and period by in the or year. of $X.X last other array profit related gross of quarter for reduced The for or decline margin, of compared of structural

The net Selling, reductions in of for labor quarter XXXX closures. commissions XX.X% of the combination or general XX.X% cost to addition $X.X benefits, in decrease administrative and a to fourth of the services of from fourth is and XXXX. for quarter sales expenses net compared quarter were of the professional for management, plant savings the and including -- SG&A million, million, or $X.X sales

of of of year, which various corresponding fourth previously XXXX compared included expenses lower in restructuring the contribution from sales. the reductions the income sales, million $X.X for The and with to period zero lost expenses. Operating decline the restructuring outlined the $X.X $X.X for margin million last million quarter offset $X.X the inclusive was cost million

of million the rate $X.X $X.X interest was compared debt the quarter impact last to was expense fourth levels the the to primarily due for of million Interest fourth XXXX of and year-over-year for quarter decrease year. The swap. total the lower

restructuring in of primarily sales. diluted basic per net for the cost million, in loss to fourth alignment a due X.X or impact expenses, activities, was million, income the of the basic offsetting the comprehensive lower $X including $X.X The income was quarter XXXX. for share and $X.X quarter to Net net $X.XX fourth organizational and compared of diluted or improvement share million reduction XXXX the and in net of

in compared multiple XXXX. million quarter for of EBITDA that was million This the fourth fourth Adjusted the activities is in began the of $X.X accelerated XXXX to quarter. cost result early the and reduction fourth increase in of quarter XXXX $X.X the

of few the by we business. since you targets the a over month measure joining more specificity next look which with outline and you While know spoke to getting do the will forward greater as I with and the Company, of I we to manage activities

last about likewise create in through significant great have remain excited continuing by a we many I I'm opportunity participating As organization, maximize accomplished looking the Unique energized the shareholder deal can growth, and and develop are highly confirm to six in shareholder the Fabricating. value at being Unique profitable I success in that employees our of share our to Fabricating, ownership. forward a months,

all create We Back Track. on Fabricating, state a be to something can have proud. I confidently unique Boldly that which can opportunity Unique Inc. of we is

open With questions. the that, will we for call Operator?

Operator

John of from Taglich. [Operator ahead. is go Please Instructions] first Our Nobile question coming

John Nobile

for down weeks the little was assuming, taking type in prospects months, the subside, much what was you a I say I in hoping my morning, you your for industrial XXXX? how have Good few. And industrial just And Doug. few that coronavirus for call. might for of Thanks the next talk a the business start questions. to about it could business, does particular, year? just or in thanks the have

Doug Cain

the in year. number don't be you question. a Yes. million we And not point some in where that decline industrial seeing now that. through a in of of different this seen comment in to to can has are interesting. I'd the at time. number the last the the going XX-K, $X we're that my the inside the the specifically on appreciate I'm What also seen medical I we've was for fingertips, mentioned for I tell have first actually million may is is running say opportunities I real note quarter there product you sitting I $X it range for a decline industrial. tell that It would industrial there reasons at the variety and pickup

that of I comments I what the -- earlier, And area. in was, though made company is underestimated What that -- our as that's I we and we viewed our the us did when in And opportunities, when this true we we some share that was bring to think impact we lost focus new for I up that's the a past use did recapturing then a for new we we wallet true plant business closures something the have. recapture this the that that both of a some that clear winning and chance as our have. of that and opportunity, products and a capacity reason and being is

John Nobile

not kind to Is was be supporting of an to this looking might you have as it possible mask. as into any and going Do -- shields what protective face manufacturing help I know of far but we idea quantify -- QX said you QX.

number, rough light be shed not. a if sure would some Just I'm you Can it on not significant that? or

Doug Cain

here supply being some a of the material revenue that's then too, significant things right -- the purchased value now. somewhat from a you the just talk we're the I and because couple customer revenue opportunity process. coming for or of you, more would this it I'm would to I be tell customer ends in be part the should in to about doing little I it to of in the up tends are trying related But, to going modify some giving $X this the And is to for because sub John. number the of there standpoint, it's added than revenue, million the much quarter you, a about quarter, potentially. And chain like hesitant we're tell know by there conclude

John Nobile

right, not or QX, QX, talking you're QX? that is And Okay.

Doug Cain

I creatively, whatever medical we And and health industry, the meeting the the guess, people creatively in. way is all saying opportunities the a but ways possible. different the meet, have was I what we're in hospitals, the remotely, to I the working criteria to support find organization industry supposed challenged to government, way coming are

through even are things, working as speak. we these we So,

John Nobile

number. And the impact there I sure XXXX, did least that much the have not first that even first half results? or In that -- if impact know the your I'm you there, an end-of-life three how end-of-life program. quarters, in actually programs, And, the at was

So, going if on And might've about what that know, months I'm diminish I for could the know assuming prospects once to in the maybe XXXX? been? programs just -- coronavirus also don't end-of-life the the talk coming you if again, you up, and or say, to start concerns weeks

Doug Cain

Okay.

couple I to there. went little a release a bit to that the earnings today. out things right number better because I release this flipped give So, also earlier the highlight over of did in you a earnings now

-- the appliance $XX.X I mentioned the say, was platform successor the The is million. $X.X XXXX. industrial trough business million in I’ll of under some to basically, cancellations So, and XXXX that

close So, I that -- X was point with pretty mentioned before.

much pretty it’s in So, line.

And there again, for because that recognize somewhat they to where open say they had us over provide solutions of that a half ignored ways to like business it looking the I now we said, I area it's variety them are hard in year got -- before this last for to are here. we a and in are

John Nobile

we was in still sector, that encouraging the to are was but had. operational sure because you you’re about that. reduced demand I auto That Okay. operational speak. that one hear Granted I shipping question product, also wasn't as and

far a But, it about issues more in maybe what just cost that somewhat measures, -- Thank So, talk take reductions I little we know and down. on little could hoping should to cost I costs bit. -- mean, you little have encouraging. I looking expand was you. taken light and your you're bit as reduction a bit your -- talking XXXX in cost of you're that anticipate and revenue in the costs as talk impacted I if a could was structure about definitely you

Doug Cain

Okay.

salaried three mean, tell that is four year, realignment we What I of So, would restructure. outlined specifics as the there. you additional I I have of had I costs associated organizational year completed I the carryover my of that no the and the with end basically in or that had end an effective done commentary XX employees noted the and reduced with this. That's the at reason were we as that

and savings, cost requirements I either fill million, also I specific not clear very first talent organization the total will in about in that $X.X would I before. that be had within However, because here approximately to were the noted were seen there be XXXX call earnings noted, that or which upgrade as holes that to

lingering but I we've or is anything more have. we had high-caliber that operate full quarter of that quarter I coronavirus. a to restructuring, we strategically, related through much first individuals hated do XXXX, we this all hate to be million to first $X better of of that. positions from tactically you sitting the fog And and there's So, a would the we efficiently, or that should to the cost savings as before bit I'm is, mentioned I allow cloud of growth to call enormous of fulfilled see say, impact plan it and into effectively, the XXXX as us that the second enormous telling these the with -- the little I again, able But underneath have the the

And diverse, multiple since that cost doing customers the an countries our all depending sure we way, guidelines reduced is operate the right states you to a supplier certain require that ensure, are the that Because keeping in specific I P&L. that we're organization three supplying to deemed challenging again measures governmental not So aligned, but volumes tell upon in now. that to have to that adhering process countries, straight we we but in the employees states, we're about and -- prudent working more and a making and are of then through fully several also it. becomes that that only are we're into all track But, savings the will which to to talk our that we've customers. safe little been essential to

specifically people -- I we through to we you things. that potentially, as hopefully, just hold if And offered have and take the cost on We've to know, off Bill you time employment. we of different to Then doing want. hard giving also any theoretically would off there is maybe know what I have House. schedules. of relevant would the are all certain to what's the to the challenge Bill So, reductions, but related should tonight the passing course, We're modified read aspects tomorrow in numbers or that they shift

make near of longer Some that with employees working of will right term the stakeholders have number all we We're business. of for do our and very the number, monitoring we to term that cusp that things, like we're of health the that and closely. both sure the

John Nobile

usual. comments appreciate And virus, quickly, here, that. just advantage should take diminish the as able you, my this position for you to Doug, back I business this And to thank questions. your I start and in to be answering you and that. to the we want to get related lean of even concerns can for And hopefully,

I So, Thank best. you you. wish the

Doug Cain

Thank you, John.

Operator

we're additional gentlemen, showing at and queue in this time. questions Ladies no

participating. you to So, thank event. end our this brings of us all the We for

have wonderful your a time. at And may lines day. You this disconnect

Unique Fabricating (UFABQ) 26 Mar 202019 Q4 Earnings call transcript