PFIN - Earnings call transcript Q2 2022

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Operator

Good day and welcome to the Q2 2022 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Richard Goodman, the Company General Counsel. Please, go ahead, sir.

Richard Goodman

Thank you, operator. to second welcome call. XXXX and morning P&F quarter Industries conference Good Officer Officer. us Richard and Executive Operating are from Joseph Chief Chairman, Chief With management Chief Horowitz, today President and Molino, and Financial Officer;

which in any estimates Before we like to subject management, and discussed company's I'd are based get the our performance periods made press and statements, forward-looking company's well from by today's by current those company's and historical forward-looking future outlook, company. company's upon can release risks you those call as are statement various behalf to on as including and most our statements recent the cause Form remind on could started, in expectations, actual that on you plans related any future website, for and described results XX-K. of to Annual which performance the the forward-looking including uncertainties and materially SEC the XXXX today's differ or on find factors filings, These under expressed to risks our in are Report uncertainties

minutes. call respect particular company's limited the caller, to to any XX conference a with Forward-looking publicly forward-looking future with the other only as obligation which question-and-answer revise this that I to on are or developments questions this the and that responses result policy the would as of speak otherwise. the together new earnings length call, undertakes or are of statements, all is or participants no date whether made any company like of to remind statements they of on update stockholder information, management's from portion the also

condition morning that, the related during And you management of adhere must to to aware questions answer this relating that will beyond insist We operations be financial that any with not the over I to like to the and please will only to the questions quarter this session, XXXX. second entertaining turn would results company's Horowitz. of of go scope the directly that call Management Richard. Good Additionally, procedure. now call. be Richard question-and-answer

Richard Horowitz

persistent product of cost rising massively retail ill other among and significantly improved six-month June our was a Rich, Gear ocean June outside XXXX, on three pandemic. hope for XXXX. you as of navigating which was in headwinds how the effects balance quarter, us the I Further, P&F the results these joining all our ill your you the ended try and while to raw retail impacted labor periods are difficult driven margin the quarter the up to months results of Jackson flow I and largest highlight global includes pandemic, results I to discuss discussions that the today, direct processing, the and related customers morning, XX, of as and three horrific for to costs through mix our gross the would operations acquired the XXth. company's company's released economic attention earlier doing world these has lastly, to periods business, Good of today revenues, June by, the effects and first to thank that to in rollout, country freight -- total in shipment factors, are key ended factors and and customer continuing few The for earlier same cash, and global customer which release of the materials, compared results. press the domestic like statement decline destocking wish all high PT edge XX well, and well. company's second the to sheet, to

be mindful of purpose the to make better to like of remind order of call. I'd this in Finally, of of to you you the have following. use time, all everyone's

our has First, conference it several standard practice. calls, for have as done we become

directly morning's move to this will what’s session a We question-and-answer already and not release. press restate in

only the financial next plan to shareholders the then please or XX-minute that your condition the of questions, To be company's questions year. and Q&A questions answering we’ll operations procedure, to please would the the would of related and other multiple have We insist previously pertinent hear And this to the XX-minute please portion that within with Richard of to that, Goodman that be results directly relating not limit please, quarter may we go line. operator, the questions And questions this second the now. mindful -- Please enforce, aware extent that happy scope noted, which will move you management complete or limit answer entertain you must up with as be callers always. we will Secondly, on the this open pertinent time of lastly, to questioner. call. that of to any beyond be we question-and-answer

Operator

you. we'll Thank take [ph], caller Investor. Timothy he's first Instructions] from Stabus Private our a And [Operator

Unidentified Analyst

Good morning.

Richard Horowitz

morning. Good

Joseph Molino

morning. Good

Unidentified Analyst

earnings that get what's -- here gross level levers needle you looking Depot profitability finally recover points -- material at growth company or it but is, potentially whatever give that that in your yes, guidance on the XXX a been XX,XXX-foot qualitative whether restore to gross long has your your optimism margin the Congratulations that, of speaking margin, a has high-level to optimism or -- commentary share. at specific your and can that can -- some but material the I'm historically, company here the optimism. a of basis know material. Can for $X XX,XXX, lower margin, the asking you sense a plus I'm what's shortfall? perhaps I on earned Home revenue not time of company if and per back at a broadly some be pull looking ability profitability, company and would the but we we've to move

Richard Horowitz

depends XX% you, But raw weeks material and -- more product what could just possibly give range, I'll us crazy. so that, to so anymore, about one what's get had later, to just the negative of in are to that what any in keeps ball but that I enormous another let a and the crystal about are that, from can vendors I XX%. give every you add like not didn't How unpredictability materials have in it increases you're we you you everyone the day the of and in able color time, answer I I could so if saying, publication really we and talk in we maybe on we mean read. I weren't every a to stuff very that two procession combat facing all the can general, that. We read don't a looking think erratic will if any high-level Joe, but and our If see them you just but the talking we concrete get the Tim know much the today. because us Joe to going only for try price act it you so a be I but wish most economy. just by a part, on don't for that? can -- because there's It's do review, there world. so more answer, start increase in

add want may to So on to Joe, that. you

Joseph Molino

Thanks Richard.

one true. to on say the that in are list I we it's customers have customer to Richard's on quarter, did I that really customer shipped. so I our all think comments would margin Pneumatic one repeat. you a general those margins that, for that of order the large won't obviously That's and short lowest side, us relatively Florida focus move remind retail

So average the come just will up mathematically.

increases the with the fairly concurrent quarter. We rapid and we increases. input side Hy-Tech price throughout up were side, the On had Florida catching

committed sometimes I think the get got frankly, little up were, your a price bit way in you've goes you is input it because and behind and of sometimes a then that's caught a squeeze. when we a step

catching specifically big drop in into in we're to Tim answer increases what time I'm we've question we said just pretty the I going in by optimistic of passing. to just some specific to but virtue of dent is, yes, input margin. can up the that we'll be very think a I costs. go address initiatives Having there won't that, do, got mathematically, your make

was on these mix, catch-up of bit it changing our Some rapidly but of some also it was of little a just costs. playing input still

Unidentified Analyst

you are to of another sales the industry view view you and as oil and going, Thank but in as you. would the to we be as relates gas on satisfied Specific growing this we large related business is now exactly our -- much see student is that not clear. our call, -- business where needs where as for that's as it's how to being actually base our that decent ourselves the where that a to company and do market the shareholder customer improvement I'm and further and or characterize where potential with it's what profit? now it or and

Richard Horowitz

-- become that of important do near focus of different Yes. at the get the And customers. a as and so is to definitely picture basically near in different changed to and our kind in so? and business calls, products so it's it's business for the by nowhere get in of you business. it is much want -- of we of business important while, in oil perhaps was or nowhere -- we a don't area. out but to less see it's We're our Tim, P&F that our as our done it's on phone expand near haven't of than you orders dropped that is we the we why as don't that it be. scope a really have We've used mix all, doing sporadic high-tech that, once the a these nowhere had but of and Joe, orders, gas factor you dramatically some but orders part as -- not

Joseph Molino

say to gas revenue just a I'd was it XX% little sales. might Tim, a the XX% break Yes, to time of when bit. generated Hy-Tech have and down oil for There

in transformation to of struggle I even Hy-Tech, Now with say it's the XX%. that the company

Unidentified Analyst

Okay.

Joseph Molino

as five And Florida, probably move there's to most. much needle Obviously, really robustness sales a have the and we was going at well, of six maybe never it's factor. not as it's might Yes, extent, piece, best. customers to the ago. of it X% or years still it there, have significant but for much at they just those do It's a not there

Unidentified Analyst

don't up would me. else something Thank you imagine. hope what Okay, might you. only something if shareholder I but large about fair. another would I that to queue. get them. would the know to I comes back Probably going -- in back care is, come policy I'm

Joseph Molino

Thank you.

Operator

we'll [indiscernible], [Operator Private Henry you. Thank And from Instructions] question next take Investor. our

Unidentified Analyst

morning Good gentlemen.

Richard Horowitz

morning. Good

Unidentified Analyst

was what year in provision -- Could any quarter ago? compared for doubtful current the to accounts you if a tell me there was the

Richard Horowitz

Joe?

Joseph Molino

is we files. That a our I'm we that probably somewhere not number publish Q of, have it in but aware

don't we give want and you know. But minutes mean seen minimal you related you'll can to at we number to someone's not would very to this and We'll going for If that compare say we dig we've is it's dig the to say say but would few receivables, December. getting I a in what probably it's to want up. June not paying. our if a that can you're material. I general can give the prior healthy pandemic I that's maybe get zero, people June June that you I how losses to us number

Unidentified Analyst

in-house, over significant with XX-day handled they or the of agencies? receivables collection are are those Any out

Joseph Molino

I'm ahead. sorry Rich. Go

Richard Horowitz

generally ahead. house, but was in I go --

Joseph Molino

say get can't did but that's put I it's to the numbers something out them collections, I that only never for minor very Yes, you. we've and usually

at those you the call and XXst, $XXX,XXX but grew was $XXX,XXX, periods mind provision from to So, dramatically XX.X%. of December between the X.X% it June at end AR

So, an unusual. is ARR healthy. I don't think very that's

Unidentified Analyst

salesforce? to salary relating Okay. the amount it is a question One a fixed plus earned or of Is and per last the person it commission? salary compensation

Richard Horowitz

salary -- and have you We -- thing, the one commission, some on we the depends have have that couldn't I specific some couldn't and person job salary. people full description tell on people people salary, and commission It some we is in. we there's that the on on company

mixed it's So, a bag.

Unidentified Analyst

I'm back going Okay. out. you. to thank

Richard Horowitz

Welcome.

Operator

at One questions a Thank apologies. you. We do no Stabosz from Timothy have time. [Operator have [ph]. My Instructions] It appears moment. we follow-up this

Unidentified Analyst

Shapiro. he going what's on had of I sure with his questions thought own. not I'm

through that in enough statement next to we're capital it not back a a state follow-up be getting way. I'll of in your business that a the the several appreciate confidence of you healthy going dividend to the first strange. is broader to for by got commentary that's quarters. presume level announcement my burning here. that the the to So, I I original dividend Thank gentlemen. pay question on be a the also

to was ask I guess I a dividend added my buyback You to way that. or sometimes Board question be is Well, now? because wrong, buyback would which that? the and I'll possible need the is respond follow-up What to don't the the Richard What on as is know $X.XX in where comment can it of it other friendly this you change has great. or stock at got right the we and towards the attitude the but -- Board's on

Richard Horowitz

then cash between as future, I've right told our to our are asked at we every it's and this Board the the meeting and we talked formal Andrew that Sure. talk meetings Board And felt we return telephonic try else priorities We talk now commitments what about return to if the and start our question. to it to it we the all thing. anybody of what about well. for as meets Board a what it are projections have time in to want we We the stockholders about are felt at function stockholders

continue it talked we dividend. why But that's comment time, because about stock that's can't time don't if want about any absolutely really to and to back it to right improve, we really. we would we things buy the We have say improve but So, at all it. all now, went that

about Sorry that.

Unidentified Analyst

Yes.

to release I'm perfectly capital fund reading the sleep we had otherwise, declaring the that working right? some goes press a capital it that are money night, I now. fund the dividend and release, we've on actually is So, Joe, You the well comfortable you base without asset otherwise that's demand in or borrowing said press paid growth some I guess guess that needs to you grow what very guess saying as -- for the dividend business or I that here at with you're

Joseph Molino

sleep I position. do financial well, comfortable don't maybe our Well, nothing to it's Yeah, very P&F. I'm but perfectly with with

in question. Board your flow expectation, yes the was answer so cash uncomfortable if let $XXX,XXX my the have know, Our or with I but I quarter, to would so obviously, the

Richard Horowitz

call, is we'll and remind for other next next will in we me special the Let and anybody future to you of world, depend company's to on look operations financial for factors. look this foreseeable quarter, a else the our it relative uncertainty going called because reason the on the Board going a and that dividend and quarter the we're and do condition

quarter special So it's will analyze and that. every it a dividend we

Our is hope time. will but we this continue, and that commitment at plan make can that we

Unidentified Participant

a the accounting dividend just briefly, of Joe, regular special terms the Okay. dividend entry for the whatever? or difference accounting, is versus a in

Joseph Molino

but time No. since no Not it's a to knowledge, long exam, say, my CPA no the I there's difference. been would

Unidentified Participant

that but existing from return taken something was you negative like have may or on... it retained Sure, I capital versus earnings guess

Joseph Molino

difference -- It's financially. difference. what no there's no we're There's No. just

Unidentified Participant

back give way get a or getting the Joe what Is that Is a we I been guess doing a return eight finally is a way us level, the I Richard us numbers, Air you've a four because there for has of guys is, that normal? that qualitative some you Boeing balls and knowing then way as shareholder. been give -- of -- sense could really of you what again potential that deserve a there behind. And may Okay. that to come opportunities at qualitatively, giving a could could way achieving not of here, no frankly there mean or have of And the sense? my you sense you credit could a went question you but one to Max, final

Richard Horowitz

we that either. promise I a now. can't you think but in the not think very question as predictions It's right GM we dismissive, nobody I'm answered from I earlier. knows. has we the being world we big question it mean, can I just I so answer not getting for mark you're do -- don't where... forward future, Nobody to don't that

Unidentified Participant

you ball crystal though. look actually Could into your

Just kidding.

me. Okay. for That's all

Richard Horowitz

I wish I could.

you. Thank Okay.

Unidentified Participant

I'm ask to was as he so said FYI. Thank an much. acknowledged me in, trying he's him, being text at he's even sure very just somehow Shapiro you hopefully but get Mr. though wasn't gotten to so not trying

Richard Horowitz

Okay. you. Thank

Joseph Molino

welcome. You're

Operator

you. Thank

Capital to we'll on Next, Lawndale with move Andrew Shapiro Management.

Andrew Shapiro

you here. in Thank ask Hi. questions some me to for allowing

legislation Following to guys you on to that make position up a Xst. is in on a President January things won't Tim kick and few to raised to going want little That of are going that color buybacks, an I is just just the sign bit aware in until tax get more trying stuff. under some the but sure, Excise this begin the it on week.

be want then before continue might on event the in consideration to then the might dividend for cetera. get a with policy that So in it Board et buyback and a the

So just an FYI.

Richard Horowitz

send you promise I I promise you will news too. we with we you understand.

Andrew Shapiro

aerospace customers start QX conversations? Did well its last -- customers here XX% pretty the only were on-site And Great. aerospace as that conduct improve for to you halfway prospective call you PTG XX% on get customers or able with both suppliers well you existing Okay. you about like the iTEC last as Are current and want through customers North Airbus. current even the much get American Boeing call was where QX? like it on of in that as to to all further prospective visits able to said the as into overseas the into and to

Richard Horowitz

take to been is is around. my customers. there, but having percentage, there it's Joe any add but into basically pretty it's Airbus, that? XX-tonne but issues longer if can want Yeah. you with it's I of like my give you moving to course able correct, can't much cooperate anything no to we're and a getting We've going and sense the general -- Airbus Joe, get else we're get to so to gorilla, on is feeling

Joseph Molino

restrictions going in are to to have our any material grow business. the on don't I There's ability no. place anticipate are whatever effect

Andrew Shapiro

an to issue Okay. was such site? Because that get a it's product you that needed particular there in for because PTG big engineered on in

Joseph Molino

to It absolutely was and subsided. have that seems

Andrew Shapiro

Awesome.

the it occurring? High-tech? manufacturing you call Jiffy Okay. other Tool Air Where of Is is costs and/or overhead under-absorption what

Joseph Molino

It's primarily High-tech.

Andrew Shapiro

all? solutions elaboration Okay. any with industries in areas OEM worthy callout sizable high gains And particular there any at engineered tech,are the or products the of in or

Richard Horowitz

ahead Go Joe.

Joseph Molino

and heavy-duty I would it's tools area. say primarily industrial industrial. mechanisms The

Andrew Shapiro

industry that anything And any sector stands particular out? or

Joseph Molino

industries. a with wide of range working We're

Andrew Shapiro

Okay.

quarter On Can but Jackson that in thought status transition, was update? for is in the this its schedule? the with on you opportunity of call, tangible and would benefits timing QX. but progression you provide a synergies you March kicking progress for in QX Do Gears still of be the still bulk the there feel

Richard Horowitz

– Joe I where in. chime can would we quarter expect third will we again more can and well as give but say probably you you would be Joe but be to it's specifics fourth more quarter that

Joseph Molino

Yes.

As processes we're I saying don't we meet and and chain our pricing, little better of was have struggled slowed material cost supply about to we I everything high-tech the get we done saying lot us issues complex anything there that. vertically tools that are up word so complete got and us increases caught a know hit really to earlier, while that outside time a that very and QX our target lines do in or squeeze suppliers required been a it's we a have a our for integrated, some in and also down. was fairly could little don't number there of do lack for were bit input bit earlier a some labor for definitely

our of expanding We are suppliers. base

something where point a in back even say so probably fact like in-house, we're cases some Richard's I'd behind I'd to be. quarter bringing to In considering

but where if made been have months probably we that asked We you a we're six would I behind, me five quarter thought or progress have might question ago.

Andrew Shapiro

inventory the it subassemblies? Production tools delivery then in first news week's begin are before XXX have in begin coming and delivery probably – your its to Dreamliner cleared this approved think release this last up the being been has XXX and said Airlines was to and just took press American large you Aerospace, written the or to expected is in this but used Do week on So months quarters. XXX Boeing's just yesterday. are production ramp that I of

Richard Horowitz

Go ahead Joe.

Joseph Molino

is actually sure there full It Yes is It we not and halted. a of the do. XXX% honestly sales. approved. absolutely XXX that not they production part I'm of major weren't that I know our

Richard Horowitz

it mean cut They it I down was... to X.

Joseph Molino

Yes. build Maybe XX% production full I'm not to the event – in The sell but not way big that pie. it's that, yes have sure product. we a aircraft it's the XX% tools help it's in not what with XXX but come MAX that even we we significant build the it that is. probably one any impact That's would of back the that's piece a our was. should online

Andrew Shapiro

order your Right. tools? XXX And more you on are beginning to activity see

Richard Horowitz

A little little make a bit but difference. not bit really. I a to mean enough not but it's

Joseph Molino

Andrew. ahead Go

Andrew Shapiro

as probably to recertify. I sitting the brought needs to be course as well the inventory think in down Chinese it the the all airplanes of desert

Joseph Molino

Yes.

So ball, where things I sense to us that you to have Chinese a available, don't three are help while the out crystal headed. alluded you approval. don't just publicly that's that a can from you point One of hear was get that would need we

pandemic. be when month XX would building they're from is related, and now the getting the the were they're Second crashes third and is mid-XXs, inventory going before the cleared to they the where the which before a out

three we to things advanced do guys we don't really happens as much then next. when those any about about we what are know you the notice items changes read, So when read frankly than going as what advanced more of happen when does it, public we those you'll any you read, but note read have in no on

Andrew Shapiro

Right.

was Please me year and receipt or a company employee tax less correct tax if a next I'm was little carryback, $X two wrong, the the On was less I around coming $X in think for for and thought, and wouldn't $X.XX of XXXX. XXXX share approximately those come visibility about little refund various than the to current timing the there a the prior million NOL $X you million. retention What's million this until the of year payments? your it refunds over cash call, in and a credit on was course

Joseph Molino

XXXX, did month exactly, We but can't you that which it and what the still XXXX our related tell I of driven in million. refund which for happened, by was to assumption. small a receive since $X.X the it's We for. the $X,XXX,XXX the the was credit sometime a received jurisdiction, pieces. but one end still portion the various we're vast is refund majority first waiting QX is is

Andrew Shapiro

Okay. that was, the it it while what down, numbers balance QX's And couldn't XXXX received you amount breaking that's... something the month or in recall was it sheet, already and is that is for

Joseph Molino

in QX. it's Yes

Andrew Shapiro

Okay.

the that's much? remains, that So you're that is okay. amount And until part, XXXX important not vast expecting the approximately, how

Joseph Molino

Still approximately something. $X.X $X million little million a less.

Andrew Shapiro

to call right. We'll All conservative. be it $X.X million Okay.

further the interested prior to the particularly you you that gear of in if might as you opportunities us business. expand available on pursue update that acquisitions to you on, are seeing said opportunities potential company's Regarding become were calls, yet? Can

Joseph Molino

to Richard, do you want me answer?

Richard Horowitz

Yes, go ahead.

Joseph Molino

on fully going and I abound Opportunities Jackson we're miss don't speak going we're the right Yes. is for integrated on just but opinion, that anything. we're my think comfortable until integrating now we're to I everywhere, this sidelines they're saying, the to team sit I'll and focused I'm think

point. there that deals when we us to ready. environment, is, there will once target-rich landscape a the get for of It's be survey Our we're

Andrew Shapiro

your products. your and into prospective range part perhaps your these technologies color Then on an compete competing and newer introduced and P&F? mention incorporation to of be us of would on tool regarding which update you provide the with integrated Can technologies development color, cordless in, some advanced products platforms, more and time others on battery-powered Great. by or of

Richard Horowitz

Joe. ahead, Go

Joseph Molino

because I are something when is to I we want but that, know who is we frankly, that. tip analysis on to fairly we our and But markets but listening, will. of I more want announce and the these to I things continue don't competitive reasons, those for to our have don't than really table, still evolve some say frankly everything strategic don't of know hand

Andrew Shapiro

and Okay. on Usually that that the when introduced releases hasn't you investor via corners to of investors? press trade you guys press, out might web that to dig had you've new all, and products the find in been various provide web have it generally, made the it had from

Joseph Molino

Yes.

a I we're think, to I to in but say, it, going consider really big certain make up don't I'm we pretty splash moment. make we're battery-operated significant at tools, want what to we about the should what a deal

Andrew Shapiro

that's That's you. understandable. you. all, for completely I have No, Thank

call. answered in bunch you of quarter rest a This the the

Although, if you don't have number, release. the it would share press put in can't you the be count XX-Q, actually helpful. because that we see That until your

Joseph Molino

shares. X,XXX,XXX Yes.

Andrew Shapiro

might XX-Q the because conference there's the be the a doing more could between to XX-Q suggestion. time helpful don't short call you aid provide concurrently. you of the because little find a if if an That of conference concurrently. we that don't timing the incorporation, but, in of afterwards breakouts any that the XXX. your Awesome. the and a time start provide since XX-Q press release timing or especially very do be I And you of the investor it's or time turnaround an don't would press give know do until might somewhat and consideration call the to just little just bit more gap release this you analysis between your

Richard Horowitz

Thank sure. for We'll talk about Okay. you. that

Andrew Shapiro

guys. All right. Thanks

Richard Horowitz

Okay. Stay well.

Operator

conference no for or to over closing turn further like the I'd company to we [Operator the have Instructions] remarks. appears it questions. additional any back And

Richard Horowitz

call for QX's in with months. all the you your next Thank coming time results today our and forward look to next we phone

Good time. and you your for So thank stay well healthy and everybody day.

Operator

appreciate That will conclude participation. today's do teleconference. your We

may You now disconnect.

P&F Industries (PFIN) 12 Aug 222022 Q2 Earnings call transcript