EML - Earnings call 3 2020 | The Eastern Company

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Operator

Good day, ladies and gentlemen, and welcome to The Eastern Company Third Quarter Fiscal Year 2020 Earnings Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Chris Moulton, Head of Corporate Development. Sir, the floor is yours.

Christopher Moulton

Thank you. Good morning, and thank you, everyone, for joining us today.

Eastern's Sullivan. CEO, be our Vlak; will John CFO, today President Gus and and Speaking we'll the that, After open call for questions.

some results and statements. pandemic uncertainties the today to that income taxes but are or These forward-looking subject regarding to actual projected revenue, Please forward-looking trends during the and significantly and business cause these are prospects, future to expense, that taken being These limit of those margin, from limitation, COVID-XX you risks measures and statements information effects forward-looking note statements of to differ without will spread financial could our performance the discussion outlook. COVID-XX. about include the operating will and not in limited risks statements of of gross business including, consist the company's the hear expenses, other

risks information factors Form in our regarding more to refer For yesterday. risk these uncertainties, discussed filed and XX-Q please

In are non-GAAP addition, These should during today's addition results. that be or Eastern's as substitute in considered GAAP as to non-GAAP for measures useful we from isolation performance. measures a in discuss of measures financial not supplemental and call, we will believe

the turn to I'll that, opening remarks. over With for Gus call

August Vlak

full morning. good quarter to XX-Q the the and a and those quarter yesterday of Web. third discuss have you participating afternoon, we'll this We who Form us Chris, Thanks, morning and results via on those and joined the phone released Eastern's

in warehouses time. be First, moment demonstrate incredible uncertain to continue their hard dedication work, tremendous continues during offices and very The and around extraordinary health factories, I thank ability for are markets our and their us. their a would period again to They coworkers. during safety and once our the like navigate, was take a at the a to successfully to through shifts steadfastly world teams to commitment our resilience Moreover, protocols this people for in our collaborate end true work dramatic the the teams manage communities. the in and of to differentiator and doing their by agility maintaining of safety what this

of quarter, quarter third markets, in acquisitions end had the positive saw past especially the contraction an following that was quarter. our the strong quarter, importantly, bounce our customers demonstrated of acceleration as This strong well on at recovery customers. with Class vehicle of During certain our recovery light a that a in truck, the took began the plastic the a The and X have quarter impact performance. and packaging of recreational as many we second deep truck second advantage

In the the Class truck FTR, XXXX. an X launch and XX,XXX total That's exceeded preliminary our impact sales monthly increasing industry of new since October result rallied truck the dual Class mirror programs. a According new demand September. the orders organization, in market, of highest X to research as of of

fleets has heavy-duty truck We months for were units. bookings these Class confident the that -- units of are shoots green than stand for XX% also a entered now higher August. at total feeling normalization. trucks XXX,XXX that that last XX net period XXX more into and believe September a orders suggest economy the in X

September. last year. association, for market of RV September increase industry shipped the vehicles, with RVIA, That's compared estimates units XX,XXX an XX% that recreational manufacturers for of in As an

packaging. third demand and and growth personal rapid to continued units for Our Further, quarter, the business our boosting XXXX shopping of by to foods and RV of online into units demand according to to for more shipments expected shift wholesale precision care growth has a plastic benefited hygiene well than see as from end the are XXXX RVIA. packaging XXX,XXX as in-home products surpass a in all XXX,XXX

this in our portfolio optimize significant progress In to with our keeping businesses, made quarter. strategy of we

we First, of the on reorganization August Eberhard announced and Lock Manufacturing X, businesses. our strategic Illinois

of sales, and by fact years markets, We cumulative a the will deepen customers XXX products businesses accelerate are with that design one of the our mass key and X and our manufacturing engineering, these business. presence integrating build complementary experience. growth target industry-leading critical bring markets technical with into proud This combination differentiated

current allow Importantly, across chain optimize this capture us streamline reorganization and will our also manufacturing synergies footprint, to our supply our operations.

this significantly we're of XXXX. combination our We to track bottom that to XXXX the line synergies quarter expect will to by on second still the and combination contribute complete believe the in and from

molds food, Canadian-based XX, August a change on health on RSB. the of parts and closed blow and for we industry. care acquisition provider beverage, the Hallink is Also, of Hallink chemical

mold our on service cash acquire across business. we to is our well stability portfolio position prior and leverage mentioned the positioned The of strong in businesses offerings, capability overall of were assets to X Hallink. an acquisition product Big Precision call, of step of As geographic expanding our Hallink reach the important our and

create Hallink's into committed synergies incremental value team and had can customer strong even our offer talented across pleased especially operations. and fully significant know-how Hallink's material complementary that shared capabilities been highly and and We're relationships broader products an through base. integrated

believe will be accretive transaction this acquisition to onetime before that fiscal costs. and that's we earnings Finally, XXXX,

compared climbed X% XX% million. increase increase XXXX of Turning sequential to the the third financial for of XXXX. of quarter quarter quarter. to the That's highlights $XX.X to the to second of an sales compared and Net a

Third earnings $X.XX doubled quarter diluted rebounded and onetime XXXX share than of items share second per in more earnings diluted per share adjusted second quarter of the diluted from before to the from per XXXX. loss the $X.XX quarter

sheet the planning, quarter third that strong. operations. generated balance Eastern's current resources ample in on to from scenario remains sheet $X.X has we balance we Our navigate our environment. Based the believe million cash extensive of business XXXX, In

net X.Xx ratio is and As of respectively. within leverage X.XXx, covenants bank our X.Xx, our of our X, October XXXX, charge fixed coverage both and is well ratio X.XXx

on to optimistic that the pandemic measures positioned impact confident remain Eastern, markets strengthen, the We to COVID-XX respond uncertainty rebound. result there sustainable continues Although that have to well and are more in financial be to is a environment underway. we we to continue as a are as the macro recovery that of it

to over turn I'll the over financial our details of results. John go it to

John Sullivan

Thank this focus you, quarter My remarks will the for third morning XXXX. of on Gus. results

third $XX.X million third quarter million in sales XXXX, the $XX.X For to of from the X% net XXXX. quarter increased

up in Commercial Corporation, Big XXXX. to Excluding of the of X closed a which many XX%; would or Helping have declined third Precision, to XXXX and sales products, respectively. decline were sales this in partially across products, and we experienced markets products, and compared the to million by which million second are up in weakness, quarter third was in vehicle and softness we XX%, in recreational third $X of of serve. which offset primarily up the which XX% XXXX; $XX by Vehicles the Canadian we of robust quarter $XX truck million quarter off-highway quarter mirror military X% divestiture continuation sales due the The by to XX%; were of

the of and products Net quarter X%. sales in increased increases price increased net products new while third existing X% by sales

compression lock lock assemblies New plate product latches, sales assemblies, crossbar assemblies. include latches, numerous canopy finger pull and assemblies, handle mount assemblies, mirror

Corporation, to of divestiture the The softness we decreased XXXX the million the third Industrial in in to of XXXX. the excluding of Hardware X segment in to X%. markets. XX% Vehicles Big closed Again, due segment in increased was third second in results. Turning the of and $XX.X the million from the in quarter $XX.X Precision, sales primarily of which Commercial continued decrease many Sales XXXX; third Canadian quarter by quarter in quarter sales our

third Sales of Security new product in quarter existing quarter, in the Products products XXXX. third sales were of Sale million $XX.X sales X.X%. while decreased increases X.X% the in segment the contributed price comparable to and

lock lock included and assembly crossbar sales assembly, assembly. New handle product the canopy

mining Metal sale decreased the by casting decreased industrial products COVID-XX, the to the of from renewable million led $X.X natural in XXXX. Mining Products closures. quarter $X.X the capacity; Sale in led million utilities segment continuation decreased Sales quarter and extremely prices, mine were coal XX%, energy sales products to usage; and a third XX% of quarter XX%. in the back gas third which in combination third low cut growing by numerous and to which on of to impacted of

the from began the quarter XXXX. to third in XX% of of and sales However, second products mining quarter, improved reopen mines

quarter, Precision. the Net XXXX. Gross or expenses X result net sold and per for or approximately increased million in Precision $X.X increased diluted third products to Big of result compared for sales XX% of third comparable was percent quarter per in XX% Product as inclusion XXXX, a XXXX. share at quarter compared $X in of X in Big development million XX% expenses $X.X third $X.X third as $XXX,XXX, or XXXX. was million of to third share of from a of primarily quarter the the margin third the the selling quarter of quarter to a diluted the million Cost and or the of in compared the third of primarily XXXX quarter in sales to increase administrative quarter of third $X.XX income the XX% the was $X.XX income

balance third of in approximately operating of third a for And XXXX with was $XXX,XXX quick expenditures million XXXX, and generated $X.X to the compared sheet the $X.X cash outstanding quarter third to of commitments. quarter was flow now third Cash generated quarter highlights. million quarter for compared of at XXXX the in the $XXX,XXX activities by look for XXXX. our a of $XXX,XXX approximately Capital of balance

of X, and As Form credit all Gus under XXXX, of October and the our approximately and total total And filing compliance earlier, we X, $XX equivalents XXXX, in approximately with cash million. our we're had cash data as debt million agreement has at of noted of XX-Q. October $XX.X through covenants the

for Chris turn the over now call I'll to questions.

Christopher Moulton

to I'd questions. for Thanks, John. Operator, like the open line

Operator

appear at be questions over Instructions] this to There time. no the phone [Operator

Christopher Moulton

XXXX do one Do profitable? can divisions We that webcast. Okay. via in all feel have you be question

August Vlak

Products mining decline to -- due see our prices. due take -- in the year in as in Metal activity because activity part the business the in under profitability part to was reporting, and I'll natural We gas Chris. the Thanks, of and our you this in can economic from pressure lower that.

building more customer We to into the believe that those diversify believe impact that to efforts -- same factors our business are also we our don't we base. to in industrial momentum business continue industrial that diversified the And X degree. will

business return in we will saw to years. result, its think -- that a the So to we prior will performance as that continue

Christopher Moulton

via webcast. All anything I'm right. seeing Okay. the not else

that, call remarks. for I'll to Gus the over with So closing turn

August Vlak

the maintaining employees; stability; this business and virus. on These priorities, you continuity, three, Throughout with the and focused year. impact Chris. pandemic, earlier remained of shared safety the thanks, of mitigate our we include: doing which and to help So two, our strength health we have COVID-XX our ensuring financial one, key part this

health of the measuring to factories be safety to temperatures continues others, of mandatory protect and in include, employees. been them and has And priority in these social employees' vigilant remain offices. and policy, enforcement our mask measures our our #X distancing. Our We among our and

We by new our in our shareholder businesses product for I strategy acceleration are we encouraged demand the to confident ever that as to services our value. products across of and like are the as long-term than reiterate well just of our impact launches. would many in more deliver

Our to incredibly able advantage take and rebounding businesses activity. of economic are resilient

Look, it far. year an has so been eventful

some into volatility XXXX, uncertainty. and expect did Going we

positioned year However, anticipated and like would it stronger months we X year the twists XXXX. are no well this downs will end and have take, and Still, and that there and looks ups could go. one to still for the turns

As out you. feel with may reach that to Thank always, you have. please questions to us any free

Christopher Moulton

With call to back Gus. the hand the that, Thanks, I'll operator.

Operator

your and for again teleconference. conclude this thank today's We Ladies participation. you does gentlemen,

a your great disconnect day. have may this lines You time, at and

The Eastern Company (EML) 10 Nov 202020 Q3 Earnings call transcript