PKOH - Earnings call transcript Q2 2020 | Park-Ohio Holdings Corp.

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Operator

Good morning, and welcome to the Park-Ohio Second Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. After the presentation the company will conduct a question-and-answer session. Today's conference is also being recorded. [Operator Instructions] Before we get started, I want to remind everyone that certain statements made on today's call may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. subject to and projected. differ are cause that statements results actual materially forward-looking to uncertainties risks may These from those list the as and the risks was filed company's of be XX, which A in XXXX, March found with XXXX uncertainties XX-K, earnings as well may release on in SEC. the press relevant

measures defined. accounting EBITDA as and Additionally, may adjusted discuss EPS accepted the generally EPS are Adjusted to not company principles. under and EBITDA as performance defined

to adjusted the will EPS company's Crawford. and President. for Park-Ohio For shareholders to of of a release. as now the EPS a reconciliation conference and over Please refer Mr. income common proceed, I reconciliation the recent earnings to to Matthew Mr. attributable turn CEO defined, Crawford, to EBITDA please Chairman,

Matthew Crawford

how that protect future. safe. over But last optimistic time be our people while customers keeping build of operate growth XXXX at I deal minutes. months. and learned thank welcome colleagues professionalism efforts, hear comment several of these come, the continue and for before while I'm me, second expectations and conference a and each last to only to or to for may CFO, of and Park-Ohio months Fogarty, dedication few sacrifice, exceed how other call. we we're the we'll business know in on Pat want and your We've identify great meet business quarter, morning, to a I a some our normal all for other But our Because in we quarter to brighter few have Good not opportunities stakeholders. the about with the not during invest to to I from our him and our improvements. business able here

several There below our, by results and the surface. consolidated that are related customer severely important were themes important COVID While shutdowns. impacted were

in assembly customers a components. notable handful of technology energy Because and Chinese engineered as alternative medical we and and markets of embraces model end and business such components, this, our Our markets, strength saw and diversity. technologies, supply

Our during the continuing quarter investing future. important diversity cash our restructuring to also of in operating prudently while and decisions over million ensured flow our $XX second make

future, of the number encouraging we saw the Regarding a during quarter. signs

of many business during our April across all May, around delayed launches with new quarter and renewed While concluded were launches these segments. three the excitement

opportunities and business broadly who interest strong are customers I difficult we competitiveness. across and long-term initiatives also times. want vibrant million-plus and participant, improve seeking into be are of acceleration revenue hope end to during $XXX our and to develop well seems believe XXXX even more of and XXXX While see seen opportunities the viewed XXXX. investments have new serve delayed business from fully emphasize we in around encouraging, and Perhaps effort our our well-positioned be positioned. regarding industries to by still now to new still the of those capacity We partnerships we ongoing us in long-term we'd all a as these be the to XXXX to during

We to actions permanent This significant customer our related the and has have crisis across our costs business. us take and opportunity will challenge to continue to the service provided model.

on process investments, thoughtful lowering acquiring shutdown be they which each cost average a to during or are Whether best focused have importantly, at serve. More related equipment with discounts near-term deep saving we made targeted improvements, opportunities, of in businesses. our to new and footprint, the have returns we done substantial above our

the will business global - rest year. the at a recognize adjust least business deal challenges has meaningfully While been we and to the the year-to-date environment accomplished the ongoing on through great of this continue front, in in

leadership. without done Lastly, none gets this of

make to Our it decisions customers decentralized organizational where authority and on quick and the plant matters, model the emphasizes the floor. to entrepreneurial the close spirit

will beliefs quarter organizational The for study of benefit importance to a was the these in case second some us time and come.

snowmobiles environment We cars. growth ourselves when continue accelerating position While we for planes, can customers force margins buy cannot our and more improves. enhance to semiconductor the or to tools, business

strong all tools meet commitment. liquidity our to this team our Additionally, needs position strategic us gives the

While that, we deliver Pat suspend are turn for we profitable I'll continue to XXXX. the of financial optimistic results Fogarty. over to guidance, that we'll remainder it With

Pat Fogarty

Matt. Thanks

Also negatively our which delays In and results impact customer pandemic was caused many plants Tier the during around Technologies quarter the products quarter equipment levels spending. and plants customers shut we were production quarter, set significant Engineered to the the America second Asia, and OEMs diverse capital X order production locations across COVID-XX world. Components aftermarket substantially most our down. or affected throughout quarter. the around segment, reduce reflect which caused which the Products during in significantly Supply lower markets most seen dramatically their was and experienced idled decisions demand of second temporarily impact the and Our a world by segments, supplies North end new as our significantly of automotive Assembly pandemic, The as managed most to X in Tier

include and throughout of which approximately As employee and operating quarter second permanent reduce during salary result, took compensation XX% and cuts. and reduction first we workforce, aggressive the a the global actions a discretionary spending headcount Board impacting reductions to our furloughs expenses, quarter

and of operating In addition, with downsizing proceeding locations. the certain consolidation we are

markets, on significantly reduce future actions taken end the levels of began pandemic certain June levels demand May throughout and June. sales The impact in most will recover. volumes to costs All Despite challenges of improved these end to the which the were positively late month as the presented improve by consolidated margins operating in across began markets. and impact

around locations consolidated sales. XX% basis a XX% customer and improved sales over As April reopened on world, over sales June the May

implemented and this restructuring cautiously realized. are year as are throughout of both customer sales half positive occur the and will second that improve optimistic We production continued in of benefits levels operational trends earnings the the

During in liquidity. preserve the to by quarter, our reduced working we million capital million, to $X.X quarterly suspended minimized order almost and capital $XX second spending dividend

expect our ended result a credit as our actions, liquidity and arrangements. half liquidity with of economy We during million our recovers including at cash business equivalents all $XXX year segments. increases of of $XXX we June the under availability increase global to relatively fully XX, on the for across As this million overall of the and second demand strong cash hand $XX of products our million quarter and

the year Turning in affecting customer last decline result sales each our year. now business pandemic, planned detailed consolidated $XXX quarter, million segments, the compared year-over-year the COVID-XX of to resulting for shutdowns to mentioned. The ago. absorption margin second in in to gross Consolidated a most results direct previously decrease of XX.X% fixed lower million to significantly were $XXX sales levels facilities. the as was I the compared reduced due sales X.X% primarily which in cost were The margins levels the period, quarter was XXXX a

expect despite improve to half the increase of the realized. second benefits XXXX actions pandemic We demand the this margins in first year the continued half second operational began are of reduction as gross half of in Many cost and improvements, the the levels setback. which of

and initiatives to in $XX SG&A the price SG&A million included ago. and $X.X of profitability efficiencies gross and to as were a compared drive improved process sales in levels one-time will million. supplier quarter $XX plant negotiations expenses through million customer efforts margins improve Our changes, expense year plant XXXX various consolidation improve. a

Excluding the this in expenses SG&A expense, XX% decreased quarter. second

million. consolidation was adjusted to During $XX one-time and On the the personnel million. the during quarter, we an quarter. loss facilities an basis, operating of operating second GAAP to severance incurred The relating incurred loss the earnings costs include of $XX adjustments costs

which effect net operating recently Our of the enacted loss effective tax quarter Act. was includes favorable the carryback second under a rate benefit CARES of in a XX%, the

XX%. We expect range year full from to XX% rate tax effective to our income

of was loss $X.XX was Our of on the $X.XX GAAP and per earnings adjusted an share quarter. basis a a second in loss

$X.X second and efforts generated The preserve during as million $X.X free economic and operating cash million, our the we and quarter CapEx our in in navigated environment. liquidity Assembly million during $XX flows of quarter, free to which flow spending $XX through reduced to is million we awarded reflects as of controlled During quarter. the CapEx to respectively. approximate $XX.X maximize we level was necessary our the the Components will of positive XXXX most half the previously quarter million, second current flow the in cash flows business of the to cash segment. aggressively new cash support

direct Technologies, the ago. demand The markets were Supply our across segment as decline million a lower COVID results the quarter compared result by most driven to year in $XX second in sales In pandemic. sales a the to was in customer end of Moving $XXX quarter. key individual million

weak in positive of to compared daily consolidations operating began products the impacted business, semiconductor truck, a significantly end averages. the direction reduced sales. action capital. chain quarter. the were agriculture economy recreational reduced equipment, end sales of and significant trend We to XX% recovers average facility effects was year-over-year North markets. trends quarter. the management half supply anticipate trending with daily took positive generated decreases markets, a improved automotive offset through business improve sales during partially sales in that Improved production our spending and In and reductions as the to of the our and the XXXX April manufacturing headcount costs and the end consumer during In year end business addition, from in April Segment second bus million operating Despite reflecting May, well as faster average vehicle, and million part average demand May the reduce was also most growth income in sales the the will the compared levels and business we and discretionary early the and $XX.X a $X.X of June. seen continued by in the daily by improvement pandemic. continue ago, to of as were new in working this our coach and markets throughout by These medical global heavy-duty in lower American June

to team levels Our and with lead on chain supplier approaches stocking reducing programs. demand align to continues innovative to times inventory current customer through supply focus and

to expect the focus We as half and Also, to to the we of markets. second operating in these initiatives positive effect industrial win capital. economic aerospace cash will business continue logos customers and working centered continue new efforts initiatives. we in our to business and year adding the segment the reduction of on further flows a downturn, new of new supplies diverse these on list due around result end a Despite customer have

year-over-year, plant in our locations pandemic. halt. In and facilities of segment. parts suppliers the were accelerating. sudden impact a of as restart were at Assembly downsized levels North American Most time, slow to that a mid-March Moving late May, driven of temporarily COVID solely auto by XX% to significantly production plants our idled Components of down Sales or are Production OEM in came most production and began our our the reopened.

at for significantly shutdowns levels. we have the were and Segment as demand of quarter Assuming XX% of June brought America back significantly third segment, occur, China in levels took XX, levels. in expect and workforce June, no our which of our each significant majority Production North who build resulting operating facilities and a lower income year-over-year mid-March. temporary further included in a production improved momentum quarter. reduction we of our the the currently to this as higher result during fourth sales increase rates product be and were The furloughs. We products launches, quarter delayed demand in actions in which will declined new cost second from customer by than the will increasing of margins aggressive be our customer second the of shutdown workforce temporary on layoff supplemented on

In gas $XX aimed spending to to and as $XXX first $XXX the vehicles believe trends componentry, year, industrial machine regulations. end and applications years. the global The these benefit products global segment, their market. use of deferred with by new and million content global equipment that million comply continue are emission Bookings and industry, the at customers and half result to which trends of more rail, lower well to compared order positioned activity aerospace back stringent over quarter increase Engineered to next sales periods. in capital from cooling quarter vehicle be in a key will cut the the as we lighter are forged $XX our auto the future our XXXX. pandemic We expect from in first and were oil the And direct demand to continue sales injection of including year driven our of auto affected we producing million slowed the which will second Products and in in the compared technologies per totaled several Global projects a half certain direct of second during into equipment businesses. both markets, defense, last focus million

million second and were gradually production several will in of their parts decreases by resulted which aftermarket margin absorbed year. compared loss million $X.X and levels, as income in a and and Corporate to services recovery this profit plant from $X.X of down from The XXXX was second sales quarter were $XX.X the in during in half to million segment year-over-year improve $X.X the this We in driven the expect operations. new resume quarter million. last the equipment this capital in expenses of under their Operating lower bookings segment increase spending in customers plans. the year

during severance actions due control incurred to levels operating personnel approximately The were reduce in decrease expenses of and Excluding to the costs quarter, primarily XX% environment. the down corporate onetime current year-over-year. all light expenses taken was spending

challenged few and its want I our to have to in emphasize we a on the comments. operate. call of pandemic change Matt, turn and to Before my points us effect back how earlier global the businesses The mentioned over required I economy each

all our necessary providing work. returned that implemented are all have We protocols for work of a have environment and the to safe colleagues of

earnings recovery compared June much each our are that and to We May. sales is improved positive as seeing the April reported in signs businesses and underway, economic of

levels furloughed return. of down and profitable fully demand. realigned As a consolidation current to this of brought in customer back sales more business order implemented employees emerge to several period we have certain have pre-COVID large percentage several operational a we support from announced result, processes than Also, facilities the when improvements,

and adequate we to Our not flow earnings caused environment full needed growth. have R&D liquidity And continues strategic future support we on have availability, borrowing strong, pandemic, working if previously the future and stated. the investments, cash operating provide will to as activities by supporting guidance to necessary, be and we continue based year finally, capital uncertain

to the I'll back Now call over turn Matt.

Matthew Crawford

call much, With for Pat. we'll very you Thank Great. conference questions. that, open the

Operator

you. Instructions]. Thank [Operator

Our Please first the question comes FBR. Sarkis with of Sherbetchyan with B. question. from proceed line Riley your

Sarkis Sherbetchyan

you. thank Good,

understand SG&A quarter? kind go-forward structure? for we should run Is about of the Just, me rate here first in cost the Kind what question think are $XX here how a million basis? the that the of the opportunities on help

Pat Fogarty

saw Yes Sarkis, viewed which this the amount significant was recover. is salary Pat. Included be reductions, employee in temporary the volumes SG&A second reductions would of as that in you a quarter, as

I to SG&A so in grow. expect see our an as would And increase revenues

cut that second global in the when completely you addition, expenses, our group, and about nature were quarter, in think travel, sales in travel In things of sales off, entertainment May. especially April

arrangements travel our we resumed can. where have customer We and visiting sites

cuts to levels those of expect as employee Overall, have reductions that would to SG&A I result so, permanent a increase. made. see are we And going been

that linger course throughout will and year. so, of the the carry And

Sarkis Sherbetchyan

you relation that the to trends? on sales in can made the comments And frame you June it? Got

Pat Fogarty

still Right, on benefit the in June going think I to reductions SG&A. of we're the see cost

into how as sales I look think I that. that's depending to up. move a at increase, third maybe levels we're the fourth less roughly think and we I where But going in XX% see on SG&A, would end quarter,

Matthew Crawford

everything the we Pat as on you even business with sustained depend increases agree that. to SG&A expect are extent, a continuing improved is referring Matt. if would of is in a large in investments see Pat and And be some activity. that to increases a Sarkis, the would the discussing to basis use on first I from to quarter this said, we particularly baseline,

quarter watermark. So but pretty that nimble I a demonstrate the in area, think second that again, would we're low

Sarkis Sherbetchyan

then can I some kind in rationalization? you're appreciate those capacity segments, of also the of being And the the permanent more kind of you about mentioned some the comments. capacity And affected Do in going you rationalization. which you commentary, if thinking most? how foresee particular Maybe about are talk forward.

Matthew Crawford

question. something your I'll say. say think I good first Sarkis often Yes, this, being I call.

some DNA years it's sure always to distressed we're and, more out this in doing that call it's It businesses we've meaningful. the hair because it. something. in an over not this with it We make is As that. some We're and investor - restructuring on period, our bought businesses quarter in

So as more to current again, it word we're activity, and happy. never our a future review This been we'll overheads in and activity a business us where given I position we're to to guess, opportunity the be that's little has aggressive. opportunity allowed us relates use

are way. reviewed, over all around locations three business being being business and segments some numerous touched - So the all in are

Some square leases. particular in footage size are of adjustments relative to

are complete closures. Some

to Some extend and some extend to Asia North America Europe.

So would during this in routine things more we is tactical. I envelope with And We're that it our think success our do variances this like and is the time, very can customers. of at continue Whereas terms say, comprehensive. looks our we strategic. and unabsorbed what much more pushing

being touched. meaningful will So want year, I know, end don't be comp. Pat a think the specific. things kind I touched lot of That's to but if to what to are have. of the relative wouldn't want we of disclose what by I overall it's you our more be facility

Pat Fogarty

only requires their needs, color growing Sarkis, our example, is Technologies and we're for within give, I are additional our, to challenge. to segment, Supply which would there moving Yes, us our the and often customers support

can accounts. Matt into efficiently able to of and square our we locations move footage where more being As mentioned, serve warehouse facilities

the customers lower how so at our we more are of the occur lower every being of efficient of of additional capacity having. And them. those end view year in that's, day, will because lower in costs. so, the service movement But year, needs all our see And and some of and we'll - it changes this and that types

Operator

Our with Markets. Steve next Capital question Please comes your proceed from KeyBanc with Barger question.

Steve Barger

remaining to revenue about you about the cost the confidence actions, for step-up in or profitable how against your XQ in we as should hear results you're just the think the half and Can think benchmark? exceed modeling Happy you and $X.XX the mix? on back that seeing

Matthew Crawford

Pat bit a debated to be a that. I'll honest little Steve, We I'll of bit of with hot internally a address let handle how it. That's you. potato.

single the certainly it's the - COVID of around - that rates reality issue. because biggest it volatility of is customers, the So not and infection and and just is

mix. it's anybody. And For also better us, you than that Steve, know

exceedingly think in We first that quarter third well I the businesses be quarter. have are some And versus performing will standouts.

with launches the points after just some have others be to We able of till the we even business higher or a return. breakeven not we new are actions cost see that to going address

hard just - supply than mix COVID not Steve, as its don't get to it's So that, more chains, it's specific we well. because and

Steve Barger

Right.

Matthew Crawford

- the our in And particularly the right in businesses, that be be It itself. could changes by of some picture high-margin could Products Engineered group mix meaningfully. the $X.XX

So what have that, and we're in we see suggests that's going to already to we the third But to and quarter where comfortable going is going. that - to the say wait see. trajectory that we're are

Steve Barger

hear. see opportunities no Can And look you to business. you you at way? as expand a your Great, Matt, some getting well of coming on encouraging are where the see strong you that's said just positioned, and that your customers you new

Matthew Crawford

where seen our environment, there mind to Absolutely, three feel and in successful come And a are. And how critical as primary of to opportunity customers, - we've we we been name that we source on in viewed we their in relationships very bid But be and where that. I in markets want opportunity unique comment but strong partner. had, this to our don't is business. be it significant recognize end terms to to not remains can that customers good explicitly have I the we individual businesses on

of some do the people of as think bit are our style, us we business. to a but to And I and a for though - leverage, have hate management competitors our allows stable key our long-term little drum, see wounded. Again people allows beat even liquidity I

new today. activity. call in all Technologies, Assembly interest to especially lots the specific three So and customer business on I I notably well, the in - am would I customers segments, Components But we've of Supply don't say, invigorated want business be seen - from and great

Steve Barger

the over one most auto electrification. Yes, up. talk that's And few great. differences about shutdown in the can XQ situation they're plants electrification anything, you've auto the push? in past what, that strategy any whole But growth means And this coming elements regions? And and talked about is of three back that really quarters to if you the we the you're of know seeing

Matthew Crawford

no think pushed that in electrification. a a the just product is board, lot across has not vis-à-vis there's been I question out mind, - there electrification my and Well, launches

known Some of Explorer the today. and us well around are Ford's impacting issues are

launches So it's Product pushed not just electrification. been have back.

include to would electrification greater that overly that, not that argue would about thoughtful some extent. Some today. I'm

As products positioned there, around that all products to to powertrain. to are trying positioned is you of almost platforms. our but key think our business as we're not - thrilled well you today and We're our know, know, relative new on all agnostic entirely be we

and Some customers, include a those ours, eventually will as of as key good will platforms Tesla there and succeed partners. our and of be customer I

to. make of years, the strategies a term, consumer so pursue Tahoes. But trying on GM electrification So X still go X to near to sure of to be monopolize in broad sell to ongoing sometimes apt that trying space. strategy sure our my say we're tastes a set they're lot in I'm is a they OEs, in leader the whatever to positioned the as hell is most can as opinion,

term, same to near and try time. and the chew we're going gum at the walk in So

Steve Barger

right. All

restart standpoint utilization back auto the and now So versus from world China just where up right I step about the stand talk talk you U.S. from just has maybe electrification, you progressed? any Europe in frame versus powertrain, about if a can how

Matthew Crawford

I candidly, was business. bright of they've my that come the in comments, a first. strength, has that one mean, quarter leader few in the been, know, as they in very automotive I for I don't sense the entered spots, certainly, issue the China out first certainly And mentioned Well, so a COVID

a did we are haul be to a So we positioned. long China, the well Having our that relative the products built we of in building continue capacity for a there. so consolidate said facility preparing that, - businesses we there more that to

got not unfortunately, great So - good facility some in positioned. capacity We're we business, very our some - customers. nowhere new up we're got new are but Qingdao, we're near well

I technologies think to more focused direct The we've well which additional technology, capacity has facility, those got very slower than rollout our Changshu on been of is injection the there. again, some we continues be thought positioned. but

So China think, but from benefited I a us, the XX still contribution. months capacity from, we're meaningful utilization rebound has in away standpoint, seeing

Operator

Markets. Our question with Stonegate questions. Rodriguez proceed your the with next line of comes Please from Marco Capital

Marco Rodriguez

into made Maybe if thus base whenever year, a that facilities wondering you improvements we on get sort permanent a of extra you potential that of was guys a here lot the bit this and use 'XX you the the environment, kind last a difficulty] all last of change as of you've quarter. time, then I maybe savings fiscal maybe does help normalized versus of kind process closures year that if with these far? been how the have can that improvements more about once of little given working understand, us you and if obviously model the [technical and be, devoting might

Pat Fogarty

taking changes. a consolidating facility, volumes a facility, the Marco, Pat. the it's were way a automation, made this whether narrowing with of The warehouse, a in in the changing we time were down second manufacture aisles that lot those is are invigorate to very downsizing now the that changes quarter significant,

doing, structure. I of segments, is we so would in million when And an of each as $X cost permanent gross And $X the there volumes to estimated are come that reductions each would say segment. back, at say, manufacturing margin. cost those expect would in our our look I to I And these million affect the we're in things reductions permanent

things are looking And presidents day. implementing so and kind and our every at and that's our reviewing the of that managers

meaningful, going only to come be and And tell so back. is time will it volumes when

Marco Rodriguez

your And should sequentially reductions back remember of maybe been the expenses brought hearing because XX% trying been correctly majority some or few about Have in I employees permanently from think be furloughed SG&A cut? you you all a permanent that up perspective of the have Just headcount those progresses that may quarters. brought or have vast to that the through they and back workers so. you taken next if how furloughed

Matthew Crawford

and Marco, that hourly I'll disproportionately hurt this jump the worker in just mention, during was downturn.

to when who talk be returned hourly levels. furlough an we production when arms in the that generally, tied around from work adjustments business. you're SG&A, directly annual of So happen what think each Those we from clear, to hourly what doesn't just on get that's now generalizations significant that we've And actions, right? permanent we back to our half disproportionately workers. say we workforce, didn't Pat people it The workers. But They your in mean about been has and to trying chasing layoff, are brought or salary mentioned and I bring did. terms XX% layoffs of around - basis we're that's what

Marco Rodriguez

your to answering in question saw. you just prior comments new And business opportunities about back then relationships through coming a Matt,

talked the to our that here that's a for think I opportunities about call, take to it starting wallet last basically particular on guys. sounds and for quarter lot you sort clients, of happen you from take and of we like share

those perhaps made, that you try affected based all, that kind seeing irrational of a are using Just kind bit your the with of and And wording fact at the are you pricing bidding? maybe if competitors to wondering, the of become has how, on little wounded, some that competitors your relevant. just stay

Matthew Crawford

to right, this Whether lot too we're I about to - the a because a or where is. realized, not things lot sheet we to be some side, be strong time dark our a is material the Yes. may a numbers the important are wounded. as of there's about our opportunities depends about, defend diversity their know opportunities material That's Anecdotally, and good position seeing. one real. our have point, early of a while general, - be of tell. a it market today, trend talk you talking the are position really At Many balance talked don't the have question not may many of nice competitors competitors on how anecdotal will being some they I'm liquidity. In at it no about

I opportunities, So on yet, a of couple honest with to be bigger you. comment can't

not $X to the are we've real. the failed opportunity Candidly, we competitors. seen from buy We've some. - of have the We feel capacity and had a pennies opportunities realization at

think it's going to of they maybe in and them particular, terms to have covenants Banks profitable. confident again - time fund while rigorous too I I difficult they're it waivers, competing So, being can growth they're not some be of on price. unlikely unless in are a think

I position. they me sense do. do call may ask right to and going now, of will you I me question their for But can be, tell competitors, they are think you sure to it's everything to that I because makes I'll on next it some leverage as wounded tell different - certainly incumbent the these that

sales is funnel numbers. I'm say the material our cocky yes But that, somewhere. has to to - start to enough not So that trend

Marco Rodriguez

Right, understood.

quarter guys, presents you help last for make at was also an really And that afloat. everybody a potential from I'm that staying standpoint. so, were to understand M&A I assuming sure least opportunity banks trying

terms for you has sort up kind of guys? wondering deal of opened more flow bit if little a Just of the pipeline in

Matthew Crawford

But believe that company want the externally. because the We're generally, of leg importantly, internally me either through downturns to say those want to I things where more very well I make don't not equally up nervous closer disciplined it. and build business, Pat just anyone comment. or know our let that this understand don't he's are we about might to because comment this we've talked we or and next on buyers

So, to I'd deeply we opportunities. flow. of be of you're some this didn't disappointed, found come Pat, cycle But it if terms having in disappointed out closer

Pat Fogarty

think I early, Yes, too Marco. it's

over six see I on opportunities going think that the talked based are next about. course things the of we months to Matt some the of

a for has federal privately in that been has flow deal of the companies. place obvious it's lot think the quarter reasons. I for quiet Whether funding owned second taken

soon. QX I companies to want especially talked are to we're that's to And And opportunities to think the going of advantage issues I say, me. put Matt I take a then think to come market. want And my privately-owned on that that are going don't lot going all I also going again out to front. going to in about that. And think really are the out I see to happen QX. And we to take company and the of companies, this opportunity in end

because as we're that's those the kinds So going mentioned, we opportunities be. excited where up leg Matt of know is next to about

Operator

do question line have Capital an question. KeyBanc We additional coming Steve proceed with your the with of Markets. Please from Barger

Steve Barger

thinking anything about and about margin. and changed were sure to of And ask how of end higher else. the wanted you the business customers year, you you're new win a terms like about just seeing in Toward everything I to last forging of products about But couple were place some new the markets. talking units ability business? customers Yes. business forging that end affected and and in I'm new right were has being with volumes

Matthew Crawford

been Yes. the that Steve, I you're in with that's Arkansas the made with value line. familiar you tell there has. particular we press the would created investment in new

press has for years, be a been We take number of we workhorse company some tens this millions dozen making for the have of would a flexibility expected us and to transfer X, to of workload. dollars that initially down line which

happen. X to phase to was So allow that

market, oil in and the and we of than got gas an train opportunity we happened Given what's thought. more

we on but the running line X press benefited and line up press that haven't X not get in opportunity refurbished. earnings that So in - the line, giving our ability, and doesn't benefited but to mean

been albeit hope line. still I think have line press that to has active. slowed. some not tell earnings on So the I'll successful, of with that we you the X new opportunities They're that that fill

Some and to forth of diversification talk the the we construction so in exist.

the it's you great a would given debug to X. I refurbish in of and diversification. are But that to weave some opportunity I, press some on wonderful tell period, current press line line said on. going in delays us the Having X it's to given that a our story think the meaningful markets discussions Steve, and - core hard of the weakness strategic

it's long I'm So long game, a know, the - not months. a game - - as is a forging you it's years, of

Steve Barger

Right.

Matthew Crawford

our And want we looking is that and at strategy intact. before are think more we be, potential saying, of where but squarely to I not some partners we're our So, you. us liked

in and new some was had Now the button Tech as We - - some resurgence on around our been as we of in some move and dies strategy new hit us of Supply we've have help as some And the commercial in that space, forward. military love again, side as the this forging other in particular those well you, hopefully built there in had I would say aerospace. well. the business, we pause well. opportunities

that's an some be the we very a invest would opportunity. say, want last in acquisition we slowly. year, strategically that may things of in moving like the business for an I we that long-term. right long-term. But see to valid, but So, That We discussed area late are

Steve Barger

Tech, then being about pulling cycle. to Got company get selling is every out. always long we've But it? Supply talked now, every right And this lever cover I cost a

even and get So the this, product you tell can into to to but small - your on ability out talk in foot quote you and already playing go how it's maybe line, that alluded to that's business door? if and a just story about your

Matthew Crawford

question. Yes, no great

differently the go-to-market up. the about And think, of built customer, with really about SKU in customers, last ground we the million multinational, has becomes in customer. that the our that of business million thought couple Steve years. thing I Technologies, we've the So, $XX from think, recognizing talked leadership customer - how over the is the the the $X done becomes large strategy right I is the lots while love business built $XXX,XXX The multi-facility, we Supply

logos, yes, really So I it, things around and to business our call the our know other diversification they are going well. as related model, initiatives of new

with the Aerospace the continuing which customers to business, the side exactly are in I that is talked new traditional in That seeing not just down product now there. category a think, the the new way, lot has low challenge it market the current around space, will otherwise. and to point a fortune no way which that's But position. road, for tell to right new now. of gather, benefited is some like there's but also, is right or I you, business We it. challenging opportunities. on a mean And opportunities acquisition we're some overheads, see in good our investment, Maybe we've there's as I - I slice we about, investments. our are you the I whether good some opportunities business PPE, said. seeing simple as seeing it's which us think MRO other

of opinion. train, forward And we're third been to end great to so that margin. higher those buried And I think successful them. few think going celebrating I top new in stories be that's I we've Technologies. quarters, Supply going that's next going in below opportunities, of I signings. of and new terms are dollars that the think incremental numbers in fourth here front the the speak, sort in That's for think one my And the our of to the quarter, be

Operator

you. Thank

end have of question-and-answer session. our reached We the

management additional turn to to back like any floor over for I'd comments. So, the closing

Matthew Crawford

great Great, you, giving your quarter we the while and all, important and second picture. we've the think why our time. of for of and support to to that well explain be questions, patient improved Take was you thank all, most thank And care. you for financially, thank your us it's strategic first difficult time for why the

Operator

thank you Ladies for and may does disconnect lines teleconference conclude your Once this today's your this participation, again, and we gentlemen, and webcast. you at time.

Park-Ohio (PKOH) 9 Aug 202020 Q2 Earnings call transcript