AMOT - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the Allied Motion Technologies First Quarter Fiscal Year 2020 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Deborah Pawlowski. ahead. go Please

Deborah Pawlowski

good today and Motion. We appreciate certainly Thanks, well morning as time as Allied your your Daisy, everyone. interest in

we Joining current the Leach, quarter update are open and me for discuss the actions will Dick call first our taken will situation. review on President to you questions. our have Chairman, for adjust and Dick Mike and CEO; pandemic, call Chief on of our Warzala, Mike Then, XXXX, we our Financial COVID-XX Officer. the and the results

You should website of you the closed. that results can after financial alliedmotion.com. not at yesterday the have a If our copy were released on find them market

the that you'll On the discussion. well, website accompany slides as find today's

slide Harbor X for If reviewing you are the statement. to those turn slides, Safe please

results aware, that may this well uncertainties, to as during as forward-looking statements are the discussion by Securities apply you actual statements are factors well call. what other is and uncertainties in materially to with company as documents events These are other from some we to Commission. today's as discussed on and risks formal other filed make future with subject the well earnings factors release, These as the and that during stated as could call and Exchange the the on differ As cause risks Q&A.

or website You our these at sec.gov. can on documents find

which financial point I believe performance. measures, non-GAAP to out be want we some useful call, that today's evaluating discuss will during our in we'll

GAAP. reconciliations non-GAAP measures tables and information, for earnings prepared as accompanying substitute slides. GAAP consider not results provided in in this the of with isolation, accordance the should presentation or comparable the release additional You of to in a We've

over you'd X, So turn to to it slide with to begin. that, Dick? Dick turn I'll if

Dick Warzala

Debby, you, and welcome everyone. Thank

I I you all would to that like have and on healthy. before we and that, and your for interest in we this know, unprecedented support. safe begin, close you everyone thank are call are hope truly to And you we Before most heard times.

of impact great our all quickly our our As prioritized we adapted with efforts management team COVID-XX, global agility. the to began and feel employees

commitment to of our safety and workforce. the was health first Our foremost and

In fact, March, of on utilization virtual meetings. and restrictions early travel increased in implemented we very

processes social additional and sanitizing meet distancing well. were modified as addition, were In implemented to and cleaning requirements protocols

We are following guidelines public Control regulations, who Center and can Disease safety local work all employees, health are home with along and from so. for doing the

together that Allied situation. industries, as to to Our responded are ensure products evolving Defense qualified rapidly global And the to produced We its support used closely because Agriculture. supplier essential operations work Medical, critical quickly we an including

all result, believe in a our production remain facilities customers to regions. quotes approach markets. products enabled We orders As Medical adjusted our the align has seamless and to Vehicle our receiving interaction request our We with market our both time. meet for staffing the in the at operational simplified for volumes this with reduced Allied increased demand levels overall for One manufacturing in continuity of demand all and several

disruptions we of realized to the impact I fortunately in as either COVID-XX our the just delivery responsive we of customers. the refinanced close we lending our being and maintain that, our to the or note inventory in we facilities from acquisition Controls U.S. lapses built have agreement on prepared event Dynamic of closed was facilities chain, some are to ensure, have the in necessity To in temporarily supply

the of flexibility generation the are losing quarter, while cash With more capability the term. to the situation, strong have the than $XX that we not us we cash actions million our taking at provides sight prudent of and with end financial in address the long confidence

X. slide at Looking

we markets, the Controls Dynamic relatively March. quarter the the Our pandemic from of benefited in was few and solid the of we the until weeks affect acquisition impact not last really did as us performance serve the of as first diversity

first unfavorable to period. quarter comparable Excluding XXXX, revenue the was FX prior-year

to We and markets where are which seeing used. applications are they varying impacts being on related is of our the the demand products closely

been our As stable, Industrial has hardest hit, result, were been Vehicle the a market our market has markets our Defense up. and

expect we gas the uptick an repeat that had in term. we While the quarter the do in of and industry current near oil given in state to not that

been In strong, elective demand has somewhat products, other ventilators, in elimination and of guards, medical respiratory for the our the surgeries while slowed applications. market, Medical demand equipment mobile the medical have

rationale Our we Dynamic sales expect brings acquisition strategic markets. of Dynamic is acquisition. some significant the to to in our this a compelling Controls The did from resources which very influx across it target of leverage other critical benefits Controls of the the Allied, behind engineering receive market as

We our of to this take opportunity future would Motion to are behalf on the and team, excited entire of employees Allied about Controls Dynamic together to like Allied the I all welcome

with operating combined Dynamic and business points or of in execution basis quarter. Allied Tools profile XX our of system a Systematic lead margin expansion to the AST further expansion margin the gross The

and term these priorities while conditions, not challenging X, we term for losing sight as slide I'll long-term near review achieving navigate at our look goals. of the Let's and our long

with and align adjusting fixed structure strong maintaining For cost we changes, near term, are to cost. also on the our we are focusing market while over conservation discipline cash variable

slowdown a our U.S. the some to significant expect Europe. and by the in efforts impacted of a be result second in do markets, We our shelter-in-place of quarter as

company. execute critical firmly committed to and our and engineering our to strategy Importantly, resources, ensure we are of strength retain especially the long-term talent, our growth our

project focused on meet several new also internal launch as we effectively are to opportunities growth-oriented as product platforms. We team several timelines our well ensuring, new our keeping

believe stronger will ever we how the the operate focus we culture pandemic within out provided One this Allied I strategy. than will operated of in and While future, our the change we as this guiding better crisis principles by come our of and long-term

a for over you more Mike, that, in-depth of let With financials. to review it the me turn

Mike Leach

on We top slide of Dick. X. Thank you, provide an our line overview

three headwind revenue the million, results about operations first when would our was X.X% reminder, prior-year Revenue have include period. $XX.X been the Dynamic $X.X from quarter. excluding but revenue line Organic quarter of with in weeks million, the in declined in of a As Controls. FX

already decline Dick to the March, COVID-XX primarily demand related of a Vehicle in a impact in started mentioned, sales having negative pandemic on As markets.

However, Industrial offset from growth in and included which Dynamic partially Controls, contributions Medical, results. those

Asia. at customers to Sales year-over-year to consistent customers Canada U.S. of were sales with the in sales, of balance XX% and primarily Europe, total

currently operations functioning the Our China has U.S. and China full chains supply Supply by capacity well March. to in production back recovered as early were in the in and are adequately. Europe chain mostly

the revenue mix and March the XX. in market in XX our by each of the trailing growth shows Slide change X markets ended months

important an Medical. can of As broaden our and be acquired the Dynamic talked about within to diversification and the the business. of strategy in found we've the Controls growing Medical markets our scope A&D recently Revenues business past, element are from

While we've the demand double-digit decline. achieved TTM verticals to the sales in in has most TTM reflected drop growth in off due X% within COVID-XX Vehicle

on the margin and XX.X%. depicted from basis including expanded slide gross reflects initiatives X, continued mix, for improved to As XX our favorable points impacts our productivity Dynamic largely Controls. This the increase quarter

of XXXX on calls, the impacted had discussed XXXX. beginning supplier previous into during the we've some us that lingering impact As ratio

XX quarter inventory in the to to exhausted impact be quarter. gross approximately points. this the margin basis estimate related However, remaining on first issue the we first We that

of around get pricing only As of supplier. a impact given reminder, to we negative back expect half the terms the new this

decline expenses, development period. slide on in The the related compared percent sales income Moving business of reflects the basis cost. part X.X% X.X% prior-year expenses the for million a to and X. as or was $X.X operating Operating revenue XXX points margin in in to of with Dynamic quarter due first total increase to incremental associated of operating

are demand. which software to and costs maintaining our vital consider wages are of with joined variable from freeze are experienced We've aligning success, personnel very number and a and a controlling that hiring is discretionary key are engineering capabilities, note us and significant to important that spending. engineers. electronics Dynamic instituted we future We tightly It on we

income per prior the period. you bottom was share, with share to slide million, or the our results. diluted diluted $X.XX quarter $X year or Net compared for million, $X.X see XX, $X.XX per in Turning line can

net or share. per Excluding $X.XX diluted adjusted income million, business was $X.X costs, development

on XXXX was a roughly it operating $XX.X EBITDA tax EBITDA was we and percent fiscal the as for and progress XX.X% rate adjusted performance. Adjusted XX% in in XX% and We quarter tax of sales The was line effective last XX%. use XXXX metric with as our rate is determining first useful to million anticipate to internal effective year. range believe between an

XX cash of and balance XX our overview provide and Slides sheet flow. an

share. needed the end were up Cash accounted for the Total to conserving XXXX. cash or during Dynamic of $XX million approximately in at downturn, Debt proactive equivalents cash to to million. and gain net cash continue market being increased growth are $XX.X talent net future of and net infrastructure drive debt while We which XX.X% $XX and million, $X during capitalization. million quarter-end million, was quarter, preserving this $XXX net debt of from the

allowing last in refinancing with nearly revolving accordion cost of expanded February million. $XXX credit our million our to expansion and secured on upon As we facility senior capacity debt. call, feature, that quarter's touched our we an secured XX% This new reduces announced a up borrowing $XXX

of debt times times to enhances flexibility. increase was in X.X ratio the an end bank in Additionally, our X.X the quarter, X.XX times. our coverage of that At our ratio leverage just leverage EBITDA to by

previous were priority level $X.X enabled to $XX lower This defer million to XXXX We million. the CapEx million, forward the million to key our quarter. expectation projects $XX for adjusted to down from Capital move new and $XX $XX million fiscal activities. expenditures of

continue inventory good results, XXXX supply our to sales a the along with tight in X.X quarter as we with year pipeline end turns First line XXXX chain. balancing do times job were

quality. collection was at deterioration to a due was and DSO of to due Our days of in credit receipts timing elevated the not XX

that Before back let me demonstrated generating to I reiterate it Dick, operation. that our significant we've is business capable from of cash hand

available as we liquidity, financial navigate through our flexibility the uncertain are as the to actions believe to we adjust that times. we well taking Given these cash have current for changing environment, and

that, Dick. turn I'll With to back now over call the

Dick Warzala

you, Mike. Thank

approximately our convert on slide over up XX, next million, the of months. depicted would year. of million. at six was backlog the months million. As of $XX XX end next quarter About unfavorable expected $X.X nearly XX% been FX in In most orders remaining have absence and to last is the orders Backlog $XXX over were of

the reminder, a of amount million announced reported are numbers. included our a backlog As awards of just Vehicle market nominal $XXX previously in we

have three these for up year. the projects we at the will very shipments this for begun awards, pandemic the production the through first of COVID-XX we of ramp down believe likely low While levels slow remainder

on impact additional negative As Vehicle we to started increased markets our we second seen quarter, COVID-XX. to we have Medical growth experience our markets, the due while an expect

We against are managing volatility our sheet reality costs our the and current balance markets. our protecting in of

continue be global Looking supporting needs. our ahead, focus and safety of on will the our health our employees customers' to and

due to respond we've scenarios our limited is rapidly While to in an short-term. in visibility evolving continue and the run somewhat various will manner environment, we the appropriate

well-positioned goals and objectives. In remain strategy addition, we believe we strongly advance achieving we are focused to our and long-term as on we continue our

line With operator, the open for questions. that, let's

Operator

Thank you.

We Palm question-and-answer Instructions] with session. question go Greg will Craig-Hallum. conducting be now Please comes first a Our [Operator ahead. from

Greg Palm

the morning. doing are you Good all Nice okay. quarter on and job Thanks. hope

Dick Warzala

Greg. you, Thank

Greg Palm

mean in So, you help of slowdown you're Dick can any I of what kind means? what guess, sense you seeing I of just Can really give visibility you sort define us that segments. in here mentioned certain significant starting April? with

Dick Warzala

Vehicle our slowdown of Sure. I here mentioned we would et what the as Automotive buses, in everybody like vehicles, is and certain manufacturing Vehicle that call is construction cetera. conference remind broad-based. is agricultural and we is a shutdown of talked primarily as about; it's facilities. a very segment small the but shelter-in-place mentioned that I also result of The Vehicle to vehicles the market trucks,

shutdown. and In So, Europe The our business were in and I back the companies in automotive as Asia. you and -- Asia, what some pretty they we think up. is started automotive European primarily, today saw much noticed in

running. So, back business up that and was

of the seen that and companies beginning what degrees say is various mid-May starting with May we've for to come shutdown back So, have are the on. online now schedules I'll

to expect So -- we we again will those businesses. will shipping start do businesses those that

April probably one -- power well a of slowed that big to as as as the that was crawl market in down sports well. impacts the So, the

and we as so I and the of and fluid we And Medical think cleansing was motors dealing and continuing. removal with several used especially times to equipment, pieces have pumps critical the lung mentioned those ventilators, forth. sell for coronavirus respirators,

strong. be to going is market that So

We be And strong. they increased expect to will There's continue. demand there.

think to defense. Defense talk and commercial I in clear it about that business most we and it's is do there of When our We of -- our business aviation have Greg, Defense. some most say best it's related Aerospace business, is

we impact So, huge a don't there. expect

areas have will price a Our recovers of Industrial and have oil expect to us. we is comes see Until that one markets we expect an impact gas. the slowdown the that CapEx an and do on that online, oil impact and do

volatility overall, you tell coming just of that of -- I that will were out we having April one concerns that seeing. the April of our yes major So, was uncertainty, the our completed because

being think met proper that that to our workforce job we PPE sure reconfigured great we social we workforce through the our inefficiency had team that well. our to And think making I going all the severity would and of is I and also extremely a did happened, say of with the starting the had fine. the I requirements flexing you operations given distancing to ensure and be of came -- team company with what

Greg Palm

you Yes. indications might your coming sort from see be in That's just would theme it and customers this good accelerated I robotics remind of your maybe out there. might those might of automation markets. is I key so that hear if crisis? what positioning most but demand application of that maybe curious be early mean to you too any and think us in a will important

Dick Warzala

say in through has production robot couple companies of came that quite of online was to the -- were but resumed I future see space, and In a some where automation the the weeks call down Sure. the demand the shut quickly would were -- and custom back brought that they surgical -- going stable. are bit we I on to think you of a

here to there going be saw to not accelerate, But of where competitive certainly benefits. be future that the products. And to automation type some but OEMs standard is I say will that wouldn't anything certainly delivering some landscape we going as part necessarily see project-based the becomes I certain we think bigger you're and more on I think Greg a that's in

in opportunity is definitely there the there So, an future.

Greg Palm

an mean the on capability, the over presumably so building Yes. feel a customers I fit What forward? to about your across that bigger supply out I might you solutions Makes sense. thoughts about focus of reduce been of really mean seen mean companies. to have this world, I broader exposure pretty chain in sort how you've supplier. can disruptions chain of the big seems on -- somebody's about heard thinking I even like did and impact lots or any I we've mean the it more that going competitively? become supply years,

Dick Warzala

issue you is pop one that's you we things it and everybody for -- I'll to pop And a few say when would I up footprint. was it resolve whether jumped that and another of Yes, and operation no specific tell up right the very right to have operations. for now the quickly, strength issues had had matter our had helped we've their global on our we team the

to say done you would job any disruption. I that very team minimizing a our So, good supplier of has

course delays. some online supplier disruption. But there Of that as team there back our were came shut those were down, were any minimized factories so

the place our one elements And multiple with simpler package, solution solutions. a platforms, of in is that that make as company the absolutely that fact, are new for going direction a future change. not Matter several product to of okay. it order is does it Talking little solutions for customers and mentioned the to they about around an that based bit the includes projects company I

So, that. the to we'll in continue future it's going definitely do

localization we've and The done other we very for chain. number is of this of years thing we've that look the a -- doing this supply at closely been now

may times Looking look have truly that working put chain. at cost lead and parts to total and the you the inventory regions so a what cost takes at long it requirements, and of localization the supply taking true cost and on low your in

build in North in is our and in is is it if preference the North Asia our Asia. demand preference to to Europe; be our America within preference America; build Europe to build it to going is So in it in

uniquely about do suited to able to be we're So that.

where everything be every facility can't will at the think the And to future. accelerated to but primary in. that Now And you in that. do region, every is I in on and to that demand or continuing coming are looking we focus continue

will that definitely So help.

Greg Palm

That sense. make

Okay. Last this be M&A emerges balance chime opportunities is the to all there of probably presumably some Comfort this. in Mike too. at from one. Maybe you although that going can sheet level for point in nice Dick

do at this point? that versus you where focus rate So on deleveraging

Dick Warzala

as and is the I had in I'll jump can on we making and going position then mentioned all end there first the that, decisions care we at actually details. cash projects -- will he focus delays is CapEx to take kick these did of mean about be of far important can as our the as off. and the And when Mike at Mike looking if and and April. -- cash mentioning improve are strong

as that help think move forward. focus I us So will we

point. pursuing. say the are But this make what's with you financing but think to as we working they'll obviously the that our back more And balance we're and up do understand I'll current if we forth so a always speak come market -- to pick trying were at let will going And start we're and and looking all Mike customer able sheet those about respond and things to number into and sure in the impacts opportunity, short-term on at on to always we suffice Now focus. the when are things. the to I dealing But put acquisitions, surely it have happen hold come to to base. slowly, they

Mike Leach

So feel balance comfortable mean our credit regarding sheet, our to directly answer and our good I facilities. your Greg, question position and we cash

So opportunistic in if us you certainly, provided flexibility we that for will a of this feel the period timing the extra are our refinancing and we from timing perspective.

So that certainly helps.

we March. we've a build. cash a in of standpoint in out is reflected fairly sheet capital coming demonstrated iterated that the my strong end discussion at I from of And QX, seasonality And have a working As here generation. points, always balance our typically

that a of I'll note of Dynamics though sheet build the result you was the acquisition. see to balance XX% in that XX% do that

say and see we in I'd aggressively, the the team of in growth-related we monitoring facility think sure And lastly, had projects, banking mentioned mentioned a that essential ranging a managing don't did employees, very of like all we but CapEx levels I to with those from acting the identifying the Dick become team being our a we receivables maintaining relative discretionary So careful costs as working we're with PPE guidelines things payments you the expanded capital extensions in early that our if likewise of inventory if then that terms cash did also period. all receivables, type all job management credit making with our an so great normally very managing that issued payables we I peak and within in on for along in our will. process issue, the

of into good heading balance the where in we year put about things here. feel lot I again, think are the So and place we've a of

Greg Palm

luck and color the all for Thanks going right. forward. All great. good Yeah,

Dick Warzala

Thank you, Greg.

Mike Leach

you. Thank

Operator

next comes Capital. ROTH from ahead. Please question Gerry Sweeney go Our with

Gerry Sweeney

Rick morning, good my Yeah, thanks call. Mike, taking for and

Dick Warzala

Good Gerry. morning,

Mike Leach

Gerry. Good morning,

Gerry Sweeney

ventilators of you any things even a in us more versus give that an of market maybe Medical obviously robotic business your way how talks; like respirator idea the is much On fashion on in lots there towards could the Is side? broad-brush that. side,

Dick Warzala

can it we ventilators see -- -- where about little I can do a misleading would it that we fairly we it I But breakout -- down going. -- me when We We it's and Medical, we're be in I say there -- for significant so don't where as can think break the going pump let I'd necessarily the robotics which things have one well. actually bit. you into of and application be don't pumps because help -- the the forth. be you start market so into respirators that itself if of and to would -- can so It's -- me for our I -- I Medical call Industrial a have market talking granularity don't I

talk it these So lots there sell industries. piece a in is are of there and We we to times different we significant as selling about. the they of manufacturers And pump for know. into don't pumps

you that's we where an I'm reasons one So what or give don't on exact that. the exactly so because hesitant give is that it's of number, to know guidance you more

it we're for removal. areas ventilators, in in in equipment, we're I a of dialysis analyzing lot cleansing is in respirators, in fluid say we're -- would we're we're applications there. lung machines, The in

respond in -- we already we time some in applications in some So are And demand that a did what variety that quick saw of to we were on. designed was lead on short is demand we an see to applications. increase

saw crude also see the -- of for there ones market some lot that than of you the sophisticated a were here. I'll and many ventilator in markets about were to the hear ventilator that we less need the what some attempting say or for the that is companies We requests fulfill market

for some were we thought they And questioned. were thought of was demand and we opportunistic. which of duplicated levels very there it requests high that We getting we

careful. were very we so And

forward. by the was and worked that was moving then chance business online And okay. couple and designed in was came robotics that level that weeks applications Although is a for we our back on increasing we demand shutdown, back the really increasing. more I were our we felt impacted of for mentioned, solving And that's demand, the best that of already

And you about looks okay while may did equipment. at rehabilitation the in on it oxygen The Dynamic like March They're you also say website, they're board XXX% Medical. is regulator. I in Medical. on their to that may other you thing will Xth. look And say come is Dynamic

demand again, did an in as see well. apparatus, breathing So, uptick which

So I hope that helps.

Gerry Sweeney

current Any gets designed for small in contracts it segment this And on and of long two, amount there's your does, back the all year the Vehicle and that side any No, in numbers sticking that's revenue lead pump I with your is the of only cycle -- the know for are rollout with certainly with side, -- long pushed expect the especially, then sort these of, them chance, auto these backlog customers I as year. that larger on with the helpful. a features, projects a of shutdown, or of you this enough times or some to keep rolling think,

Dick Warzala

typically, the to in moving the keep want Well, projects startup, the companies will forward.

when -- just for they'll they over the cuts ready to to the products. So want demand new Okay? be

So, back were delay, automotive? some much, come shut -- say, I will fast it there's and hard factories going demand let's to because say How be right say, how for definitely now. back to Demand down. will for it's would automotive, come

desire we going I companies is from we're be standpoint. its they remind but earlier, sell factor relatively that online -- -- be if come think of to quickly I us or would of is that's So thing. -- it's not this the they that as a automotive you to the to an our And -- demand to big there. I and/or said small going point, as tell this like at piece business for the But whether

Vehicle, Vehicle is our sales. about our about less talk XX% overall we market automotive overall or -- than So of when

will -- And we that again, are is some those think broader. Vehicle our as that they're -- much in So the past. will of keep while others Okay? moving impacted, there's them along areas, they have also

Gerry Sweeney

you helpful. my I from That’s end. take it. Thank my you. Got it appreciate That’s call.

Dick Warzala

Gerry. you, Thank

Operator

go from comes question Next Please ahead. Dougherty. with Ryan Dick

Dick Ryan

Thank you.

when you you with to be there with business you had Dick, of margin the this look impact at in? on any some new strong anticipated gross price? order coming And have -- pattern, So, is sensitive

Dick Warzala

all base, there I were as think, have already very which that, course, out immediately supplier reduce very X, We to they we broke product. to had we certainly we out out, reaching committed were And their as pandemic or them already entire Dick, supply even say is mean, that to prices. -- look, think prices. past. came it's broke unrealistic. soon January We've to the companies saw unrealistic. retroactive I think that's And, say, of I delivered to certain base

can and forth. that see costs future, oil what Now there's given think, good we'll I here in given We come demand so the down. cost decreased see the a may we down, And or do our chance come as will do the are that, demand to if price demand. down. to I cost on really expect and been customers has going tell focus down, meeting now, come see you of But some satisfying

But, sensitive cost, we're our about markets overall to always ways of up from coming cost cost and were course, with material not always basis. but just reduce on overall working cost standpoint, from an

realistic, we'll we're respond we're expect I certainly some on And but not we mean, would as well. demands would have accordingly respond, us. I yes, to we're So, going --

Dick Ryan

rolling sense, might you. markets new on give Okay. us growth Thank be the you Then new some platforms, which applications what can out initiative, and you those a be? initially the -- might

Dick Warzala

our acquisition in newest is let's controls electronic which about talk because that, Dynamic and it and they -- really sell about we're opportunities. very to the We're mean, mobility I Sure. excited just Dynamics, already sells seeing rehabilitation Yes. markets.

electro Now, has and the with bring from an capabilities, standpoint, that the mechanical capabilities customers of with Allied that combined Dynamics, software platform already Allied has, demand. getting that electronic together we're already

in the same we've in to system -- see us a And opportunities other markets taken for approach come solution. for and getting we we're with

that's we that offer, So, do opportunities, upon those to And can be an us. exciting I of going the see based this attracting is for new also, that think, volume area solution unit ways reduce while our priority first we cost, can we support us solution. come component markets we for that a to out up sourcing areas become our to other reached competitive, look for Dynamic better and/or at some more production with in that's has, help some

on that the So solutions we together. we're handling that multiple organically position very in the for adding were from we're an capabilities team, years put the in absolutely solution-oriented we we're an increase few standpoint, in on. -- building resources we're area focused a focused working strongly going on. I to say, over electronics Material so system think, from area now that us have absolutely to about. Dynamics, that And that excited last that's is it's come more our had solutions years The I'll addition we very

So handling, well. the the some to markets you automation, as have even and rehabilitation markets say will Industrial I'll material needs that

Medical also with side, we side, -- not as motor we're but multiple the Medical the had now, the electronics, on side of some we've on been bringing the in offering already mechanical the a working here on solutions also years On gearing together the on as for necessarily standpoint. much

really acceleration market. stay are opportunities develop have, what strategic let's for So well continuation see that saw is we platforms it's an developing -- what Hope we focused as we we it's as the the on to and needs emerging of of, and in a continuing helps.

Dick Ryan

Yes, does. it

a you I'm for the everyone I near markets as guidance. you kind us you term asking year-over-year virtually, So, than a mean, test assumptions kind your XX% I can impact? of assumptions? in puts of of of of either us some sense that? your what are sub of your give But and stress takes, guess, near-term has variety give end you here, Something Can sense greater are? not

Dick Warzala

here. some Well. various absolutely we've at We've we've the in it by too market within you're done call here is that, and And submarkets market And correct, is us Mike analysis. done conference it scenarios it's really -- sensitivity -- looked there. mentioned, as

I to in And markets the would that So to we company you from have standpoint got throw to think out. a say short-term. I we April saw

than to business the some project the looking as into I occur, May after weeks three to the in like, future, looks can early and other clarity returning And April, May. what's into expect when -- or to we factories. financial -- may about we're through going are companies how next say, in use And what what let's that, we happen say, demand how the that can't overall the their to start for see We guidance -- picture. at to really two demand

for gas mean specific. an example. So it I and is oil very take

and is impact -- sales that definitely our mean, where gas I that's our stays, in market. if oil the I mean, going it to

slightly. So we see it, uptick

are We that But some adjust sports but going are back that. for -- right signs just and We've that. coming had the into Automotive may Vehicle that it back factories area I we've life. factories be watching encouraging to another mean, slowed another for adjusted -- Power production. that closely vehicle are down. to markets it are our

we'll June attempt hesitate I what be use any transparent, and we to But realistic. to at possibly we think, I to don't in happen as as would here. and in But Dick, two I So as be can what next beyond is to guidance expect relating the months. May three April April, think may I all to think,

we I think think finished April. to financial were we what than And in saw it's And going standpoint, we I April. be better from a pleased.

Dick Ryan

great. Okay congratulations. Thank you and

Dick Warzala

Dick. you, Thank

Operator

Geygan Next Please from with Corp. go Global Jeff Value Investment question comes ahead.

Jeff Geygan

my good morning, for you Hey, gentlemen. Thank questions. taking

Dick Warzala

Hi Jeff.

Mike Leach

Jeff. HI

Jeff Geygan

of light your as observations about, issues Chinese as the COVID-XX tariffs your Can last in from you year? production please share well

Dick Warzala

Sure.

two particular protective above operation I work issues the So operation supported operations. speed. the way say with to quickly. acquired also going standpoint the we They the and to had if or very existing on to supplier that, with tell where from talk came component to it. Chinese of let's and Controls. our they that, -- equipment second a standpoint of speed And questions, company back China up up separate the And some we getting have I Dynamic and rest about beyond. And Dynamics you in will

rest implemented They helped emulated our the that workforce we procedures think our protect well. has we very in operations us which of internally

we And what using sanitization they responded. procedures And that forth. we and protective that. how gear I as they were and So, so the left did said, emulated they

So speed. which they including of came as operation our Dynamic. part to right full now back right up are running came rates production they And at Suzhou

I'll Now stop the tariffs here. --

you on that, tariffs. have any more on If I questions jump the before

Jeff Geygan

hear on I'd thoughts have a well, follow-up. before. I'd your as the like to tariffs

Dick Warzala

Okay.

impacts had on customers. on absolutely our and they us themselves tariffs the So

dealing of think, to And with some And here. I impacts deal those we'll still we're with. continue

exemptions for approved applied and approved. in have we cases. not in we've And have -- the some others So some been been we

make could where to. to area how as an continue or to pay business So it's to have given, worsen. clearly, decisions, the we're an that, operate they to close we And some they area have it's in going we will future attention exist

best continue going the we supply ability the impact certain think, of also operating we're And it And that in of road. us. sense, areas to secondly I to those or down we'll it's here localization good given But that first through drive And mentioned that. definitely customers our state of to to while, in to impacts. think continue And towards have but makes occur our off. going us. protecting I do the impact tariffs work had may what us think future the they're the I

Jeff Geygan

slowdown out sense. anecdotally with parts Yeah. makes operate how they your to of It impact for proxy to have in? Specific China global COVID-XX how come rest a you up the given early of the world there the seem experience your loosened March, as using other thinking geography that does in might or and Sure. that the

Dick Warzala

Sure.

here, the call-on implemented engaged what's everybody We to the operations As single any around happening on, everyone and And track that. And we every world. we our called in does on if every had Jeff, -- happening part the process not regulations immediately local morning, facilities, that. we government. met reports get what's we we've but local do still still the with we of a We our and morning the taskforce instances. --

early implemented were hand on very cases of. Europe. take temperature. able they confirmed were -- And we people did were in And we you early there implemented isolated then on; tell any impact three that, we to We we into can distancing they And care I operations. on. three sanitizing based early cases. coming employees work testing close that have were great had -- to social And temperature testing X,XXX we did All And from that it masks. had on. were extent not to stopped We that

did stopped employees Fortunately and I temporary they those COVID-XX. were in were mean they cases that not end up having

to that New -- or in Zealand what again learn you watch the Portugal. we're or in the in and we're we we say, now, Netherlands, I'd or U.K., or So in see Sweden, in from, as and

So we're in Germany and China.

some every with speed about. here morning back up and local input it basis. so some get a dealing on to great we input How they're they're And and forth coming how

seeing. countries online So I'm I think and I'm the encouraged from, And back hearing come what back coming local I'm what online. and in seeing how, companies we're governments

as And are or back facilities Wuhan. had okay, As entire COVID-XX. those about both away incidents, cases facilities was confirmed up any the came miles a weeks reported of neither and from And XXX-plus couple back running. far within China, of our workforce and of

that people I had do business think it move we did same split prepared was And cases but dried some cases have just adjust effective. So Where I'd forward. do had shifts we in teams to become the we say, some bit -- our more that. to tailored we control some And literally in in little it the efficient operations, and up in of inefficient out had do while as we up to and manner. and we're had we dried to to and was coming a

process, cetera. core And technology/knowhow a And win that are protecting as And in we resources. are heartbeat not and touched manufacturing of we I turned thing have like of company. an terms are process, in we part us design what company values now. -- we've here other et strategic long-term, the to engineering would done our it's engineering the we and quality is we've our that, to process, clean say we and focus The for those is

moving control those. with As turned situation, control the we focus opportunities. the securing we the where on soon forward the side And of growth the had to as immediately our we ability we over best positive and XXX% are

say we for So our that future believe where I that's think did team just the can't what enough us, And I I we and say about bright. is here. I'd think are

Operator

you. Thank

Brett Our Funds. Please go comes next from ahead. question Kearney Gabelli with

Brett Kearney

Good guys. Thanks question. Hi, morning. my for taking

Dick Warzala

morning, Brett. Good

Mike Leach

Good Brett. morning,

Brett Kearney

if dynamic outside With But I on we've others One really guess you the been really supply couple guys showing all times, know chain through front on focused all have and I work Allied and last approach any look your done, the there's challenging of in the plenty you the internally. these and your years, walls, four as competitive ability supply in or prepared crisis? who probably market anything as opportunities throughout of market in this gain coming you are applications that allowing markets to operations seeing -- maintain weren't incremental well set your within the that Allied in continuity

Dick Warzala

looking and was the of out you couple mentioned a that And Brett One let's think already situation to worked times or in production even helped to a very our demands. together and there say each it's internally capabilities we a And components satisfy I Well, supply shortage other here mechanical that. closely the team when I is and stronger us Allied. I electronic mentioned component as of have needs again those because make going to of think

were rushing opportunities. in the medical apparatus, companies And to respirators, several were area seen that ventilators, talking and the would demand at have and breathing that in bring there that short-term, looking to I about mentioned we market certainly products

designed increase addition competition in say let's areas our was was demand In in. where there

product supply we and case if in did that needs reach a us issue. they So asked and out they could had supply to their meet

That's our on custom customers. we're many So full of suppliers. and their end engineered electronic sometimes design sourced almost motor in they're --

somewhat it's So to difficult do.

but the now in testing solutions and and evaluating -- are in and But situation do say an the share able of future. not we to I'm that. in front emergency from we in competition this you were done took we are going products that our or to we our past front we it in companies of be in were case, weren't market that can they to

short-term business, So whether from some we that encouraged the long-term or business we'll we're get that. not got

Brett Kearney

healthy. you guys, and hope you safe stay and entire I Thank terrific. the Yeah, team Allied and

Dick Warzala

Thank you.

Mike Leach

Thank you.

Operator

over I further comments. closing Dick questions. are no the There to call you. Thank like to for would turn

Dick Warzala

Thanks everyone interest on Allied in today's for your us Motion. joining for and call

all at free and to feel call. your please quarter and again always, of you talking forward results. Thank reach look a As us the to for out any participation. to we you with Madam conclude Stay day. second safe great have after our time

Operator

This conference. concludes today's

and time this participation. thank for lines your your at disconnect may you You

Allient (ALNT) 9 May 202020 Q1 Earnings call transcript