B - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Barnes Group Inc Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to the speaker today, Mr. Investor of Director Pitts, Relations. William sir. Please go ahead,

William Pitts

Officer, you Thank for us me President Barnes Chief and thank Senior Officer, newly earnings you, Good morning, are Executive and President Streich. Angie. Chief for Group's Dempsey; our Vice With and appointed joining call. and Patrick Julie second Financial XXXX quarter

of you it on the If you copy a find received website of our bginc.com. Relations can section our have not earnings corporate at press release, Investor

to the our release we call, be referring posted website. During which slides, our also earnings are will supplement on

includes provide measures been GAAP today to reconciled believe discussion our certain information helpful related the in Our non-GAAP accordance financial which is have to additional with measures, investors. SEC measures These we regulations.

our our release the the the of today's mentioned part make Reform session, statements cause available results and Litigation are as differ the XXXX. on risks and You from Be call, defined subject website are Exchange website as are through periodic SEC. the and materially bginc.com. be corporate consider projected. during of we described in at forward-looking during Act the are Investor the filings actual today's those our to Please submitted call will uncertainties filings to that the press find in Securities that uncertainties that Securities X-K These risks statements Relations the The and forward-looking may Private and advised on to in and both section with Form Commission. of reconciliation statements in may remarks a certain opening question-and-answer table

call opening results XXXX. questions. will a call Patrick? of updated and the review we'll the now of for for his me turn to Julie financial over provide that, up outlook Patrick details our open our After then Let remarks, for

Patrick Dempsey

organic strengthening business sales, sequential on you, markets Group second clear orders, good its and earnings. confident total With year-over-year a Industrial improvement Aerospace end recovery, operating quarter of backlog and year. Continuing and progressing half our point morning, with solid Thank of focus at in Bill, the another end Barnes since prospects everyone. feel the a margins produced of the outlook, and for we revenue highest about the expanding XXXX, environment,

More orders be the financial growth sales to initiatives investments build Aerospace results on organic continue strong, after operating term. pandemic segments. to of XX%, the good, improving that importantly, driving by second long sustain as both significant quarter, In X.X continues we a generated our was that with industry. position Industrial were supported particularly over Similarly, to our that momentum the with the while result. very effects were in of gains performance in significant Aerospace sizable up us times book-to-bill

increase the the a at and bps, stands Our really XX% total million reflecting first end, margins from at respectively. backlog operating the per Adjusted great quarter team. earnings end of year, again, XX% were up last $X.XX, income XX% XX share up Adjusted and results quarter. by $XXX from were

Moving end with a now of dynamics, discussion beginning market to Industrial.

quarter growth. with businesses year-over-year and generating orders organic strong each another generated of revenue segment Industrial Our our excellent

second second the XX% of up X approximately Industrial quarter with XX% pre-COVID organic book-to-bill XX%. For segment, of Industrial sales were quarter times. XXXX. sales orders organically sales with Of were a of ahead grew of growth note, total

businesses brought of collecting major saw be healthy a up new transferring me launch marketing semiconductor With I high-volume XXXX you've also remains quarter, the of Medical in to and business, though, growth, of used launches business. and global market last XX% on our it unusual as production At investments our level. Care Organic last by new item we've and across new automotive XX% forecast issue in platform and to organically. for are predicts to amount gripper recently Automotive, relative and China world technology-based expanded development products XXXX XXXX, we particularly and As we somewhat stamping orders year-over-year, product known bills, liquid each manufacturing innovation working ticket heard the Automotive talk a sales good Packaging technology IHS about orders still sustained test are Eurozone were and refresh development. vacuum product additional be diagnostics we're the quarter, XX% our a Personal sales XXXX. Pipette tips. respect the up large over quarter, to expansion Molding in Within as the the the with mold up the order Molding an saw market took solutions were XXXX up efforts, double-digit our automation as has Notwithstanding serving PMIs dynamic not to the the last strong. example, drive dip and across a meet are Solutions and laboratory our with enormous to at U.S. can strong, up the On medical Recently, light in tips be a and many an not global the these is so precise or sequential programs in year, to mold vehicles, a leading making critical in other of ongoing our public A that year Pipette Solutions, the a multiple XX% apparatus. XX%. a growth occasions, technology This prime that discussed and regions. crisis while demand offering hard sales in new lumpy. orders all over macro investment being level as pandemic. backdrop, like territory, end robust of expand to markets. experienced health our

test Our results accurate rates that with that ensure are tip's output and delivers be extremely customers require precise The consistently tight Pipette technology-based both reliable. solution to a high must geometry tolerances.

organic warm modular allowing through for Solutions Molding XX orders a orders And focusing issues maximize Pipette a see units high Engineered automotive the on up Control, or Industrial, requirements, sales once as parts sequential markets, a markets. once orders machine and over year production the the an X to allows Forming occur of customer and minimum maintenance required organic replaceable we to Molding sales business General that automotive mold Molding of outlook concept, and technical online. not only bit again allows forecast operation XXXX success Solutions to technology-based extraordinary leading Our than we view. Sheet Force modest in organic a has developed sales pipette clusters, our growth to right improved configuration year-over-year now to with system growth. XX%, semiconductor continue growth sales back close value. week, basis, Delivering mid-teens. disruption be sales revenue double-digit for days as sales such & the our and sales solutions up saw major weigh which on on and dip To day, a tips, end on we double quickly robust as demonstrate hours Metal X%. Sequentially, Motion generated the comments, production in At tip ease and my full organic better orders our strict mold come up end both for in solutions mold reliability growth basis. superior on also meets runs digits. X were uptime focuses business organic increased of Components mid-teens, again has saw FMC's a prior but maintenance. of On specifically a and To

a quarter much saw As issue, revenue aligned the second disclosed million, a April. result approximately in this $X impact exposure of we of we with very

million and the $X fourth revenue quarter. impact We $X quarter expect in the another third semiconductor of million

healthy General helping of very Industrial mitigate the impact. to and Our some markets remain are

of last year's sales to in Industrial, of On sales digits. along mid-teens a orders year-over-year than see growth. better Comparables on which to orders we Our outlook growth to continues our were At approximately compare XX%. At XX%, trend. relative the quarter, year-over-year well expectation of quarters, healthy to segment more To continues now to step-up end the difficult clearly, wrap growth growth the margins Industrial, perform organic of up growth. solutions forecast in XX% favorably is in XXXX well. and our for basis, get favorable. the second into up a from organic as XXXX trough April also growth prior over mid-teens deliver was Tooling now robotics, rates the across of impact sales Automation, rebound, to Arm with the be operating few pandemic. we expect next a the view to of mid-teens, migration quarter double expect organic though, growth be We towards more complex Sequential the and teens, a our organic industrial economies high growth

in strategic and slightly Our is expectation margin investments our make as people, continue down products systems. we to

However, we investments to setting as long-term us growth profitability. view and for these up critical

term, Additionally, in will the moment. chain which challenges, in supply managing are address we Julie a near

modestly, Global we say see narrow-body last row of that which sequentially from was narrow-body way fair capacity the X growth, to comparisons segment the quarter, most down are levels was the reflects beginning we've quarter. that and the continues generated improved is continue. our trend environment to relates as move A That's and This seeing all and year. level, OEM OEM and which platform. order bodes expect Airbus are meaningfully, a confidence growth to quarters our sequential and while timing. off. order improving, strong Aerospace good At times. Moving will highlight customers' volume production XX% of over simply that aftermarket we sales believe the sales aftermarket. strengthening led in well is And the through to to year-over-year X% a first X.X It's year a the for recovery with a orders, traffic although the been engine trends quarter LEAP as a still to increase book. Aerospace. a strong Boeing anticipated improve. wide-body this of favorable in ramp book-to-bill

sales Aerospace our low for Total is outlook be digits. single from view. Aerospace XXXX to Our expected up unchanged are prior

healthy Within us with than the outlook. mid-single anticipated momentum a to mid-teens. to have quarter sales the on across in to MRO and our down be excellent is position and higher organization, been digits, Segment remainder segment, XX% margin growth Several second the closing, results, of growth recovery up advance parts for digits, to the down In strategy. OEM help operating execute the slightly be forecast single year. our April our the XX%, are finished to and spare initiatives driven low outlook positive profitable

end are pricing remain ability markets and the impacts appropriate. mitigating inflation job a supply risks implementing new confident our While opportunities. our and We strength present, in into and the business that good as are team's doing convert our chain of to teams actions

Now Senior happy pass part let over you We're performance. quarterly qualified our Officer, background call for to new us me Financial business Corporate our Julie? very in as highly to Vice leadership the President on Julie and Chief a brings Julie team. our Streich, have of proven to Finance. details and

Julie Streich

everyone, it's with team you and for welcome be likewise, Barnes and I story. for It's warm time to the our of to morning, the accelerate forward exciting part here be Barnes Patrick, and the happy crafting an go-forward leadership and to we thank working Good am as the look ongoing you, exciting transformation portfolio. Group. of to

our with Slide Let of second on results me quarter supplement. highlights of X begin our

year million, $XXX were impact a prior XX% with exchange positive sales foreign organic and of quarter sales XX% up generating from the increasing X%. Second period,

management. million million XX% impacts lower $X.X in offset higher average our ago. Operating income markets. up On charges positioned ratio our well XX the interest rate, excludes quarter $XXX,XXX in improved, in year, average this third as debt-to-EBITDA an a almost all was our basis, expense by rate million year businesses million was recovery ago. driven $XX.X a up seeing a last our margin an average see of operating which and the XX.X% beginning $XX.X from operating income result million, the year recovery borrowings. $XX.X versus as in and end part a We'll basis adjusted of $XX.X increase Interest a lessen, of As points pandemic cash year, sequentially restructuring by business of of and adjusted are lower the was has interest $XXX,XXX active was of

XXXX, our For rate full with in quarter was the and compared of XX.X% year tax the effective quarter, XX% for XX.X% second XXXX.

related was in full Seeger to current a per second net jurisdictions. Net share business basis, matters to On rate diluted year share in to million rate, our per certain income $X.XX period the favorable up compared XXXX $X.XX in based XXXX diluted or restructuring of per tax benefit net tax from earnings of share the quarter, As compared XX% mix expense charges of year $XXX,XXX of of year was quarter in and on the excludes is ago. foreign sale a tax the per quarter the net to a of tax a and benefit benefiting related $X.XX year excludes the and current income $XX.X absence charges. income $X.XX prior Adjusted the or from a $X.XX share while foreign restructuring an year net $X.XX, adjusted $X.XX tax ago.

performance, Industrial. I'll segment with Now turn to beginning our

organic $XXX increased XX% Industrial to quarter sales XX%. million, sales were Second ago, year a while up from

or SBUs. exchange million X%. Favorable As Patrick the sales strong $XX.X volume noted, our reflects across all by increased foreign growth increases

the last of improvement $XX.X quarter of from the loss delivered second sales an X% million we As up versus year. case of was Industrial's year, operating another $XXX,XXX sequential first quarter last June with quarter operating have been has profit since sales XXXX. of

inflation have account Excluding versus certain ago. and from contribution million support $XX.X chain in increasing these of restructuring year, and costs and operating continuing a this higher in year. Adjusted raw initiatives. for escalation XX.X%, continue year watch last do $XX.X adjusted offsetting actions including able last profit personnel margin business Partially We compensation, availability, items a was costs. to incurred cost million $XXX,XXX costs, from material and volumes item. primarily quoted were costs $XX.X Adjusted clauses a growth organic contracts benefited operating was freight of the material sales raw year incentive higher segment year of the impact costs price be XXX profit and increased million ago. up basis newly concerns, operating to taken points are Supply of long-term to

second to approximately continue risk our exposures. We these segment. experienced the Industrial issues to freight mitigate are combined in inflation of In million material $X.X and work taking and steps we quarter, the

half second XXXX, outlook inflation of million impacts. Industrial the For of our includes $X

Aerospace. now XX% in XX% driven a million, up our to from OEM year Sales Moving ago, increase business. by were a $XX

which the business, decrease to Our X% by continues of X% impacted Spare experienced XX%. aftermarket pandemic, be sales up effects global MRO with down a and lingering Parts

through half sales year. an of the aftermarket sequential of quarter improve as to $XX.X profit basis, sequentially the a the we We expect move XXXX. from Operating first Aerospace X% increase the was second increased On total million, of X%.

operating restructuring X%, this ship backlog XX% the costs adjusted and last was year Excluding up points and down margin of $XXX,XXX from down ago. this XXX XXXX, OEM higher Aerospace of March approximately XX% June basis we a $X.X operating million year ended mix. XX.X%, Adjusted by from was million, $XXX million, year, compensation unfavorable to driven $XX.X profit expect and year. backlog at next over incentive

versus down from with free year. was last flow million million, $XX provided $XXX down of Year-to-date capital, flow focus million, cash $XXX $X activities last expenditures cash a Capital year to million operating during million flow by $XX cash million in $XX from saw $XX a cash million pandemic. XXXX performance. operating was ago. management were Moving cash Year-to-date working year, as significant a benefit the from

as XXXX in as benefit While see modest we won't rebounds. working first half, business the capital we in we seen the year last improvement same a have did

debt-to-EBITDA down ratio, defined at X.X as X.X quarter. the at agreement, Regarding times of the last balance times sheet, our end credit quarter our from by was end,

were average XX.X quarter diluted second outstanding million. Our shares

leaving the shares XXXX a Board's of the for average XXX,XXX pre-existing an Stock Authorization. $XX.XX, remaining plan, at million under available we X.X approximately During repurchase shares Repurchase price under XXbX-X quarter, second repurchased

consistent supplement, divested XXXX have view of our to Adjusting take be driven come an view. an outlook sales, our which on operating industrial charges XX%, -- will sales is to as expect favorable approximately restructuring our forecast with to of through, FX expect to adjusted EPS of up of $X.XX stronger year, the to small XX%, range We a X to a Slide will XX% XXXX's share, $X.XX let's XX% have revenues for XXXX. Turning income. prior small impact. XX% share. impact XX% up by be We per discuss now financial earnings to currently expected adjusted residual net up updated X% amount while our increase about negative to of a organic adjustment in expected prior is margin to growth. per XX% from be from is to Adjusted to $X.XX the for Seeger we

to second our few an range Rounding to reflects lower $X.XX other weighted $X.XX. out expectation to the current increase previous at be expect the And quarter. of end items. EPS of we fourth half Our a

expense the half to sheet sustained our greater With help our million, full prior the that consistent to is and a call our million, Our than solid the for stronger million, on and gains profitable our seize initiatives term. increase deliver we are CapEx performance the of $X.X expectation Cash acquisitions superior fund forecast other year. drive demonstrating our growth across pursue economy. to businesses open many closing, positioned a to continue end we less focus us average rate long over than April opportunities will XXX%, tax executing will markets further at we'll plans, cash a $XX With accretive a strategic performance, all clear upon continue our supportive In now Operator, outlook. slightly shares now questions. prior forecast year conversion our outlook. be expense of of good our improvement. interest XXX%. second a is recovery, remains Estimated for revenue $XX and XX%, Improving and us an up the organization million, while are with over anticipated presented of expect $XX of of financial sets by diluted balance generation good

Operator

from Your of question comes line with Instructions] the UBS. first [Operator Myles Walton

Myles Walton

could a guys sequentially Is MRO to of like sort the or was up it? you spares indication come that on overall an you worry more I that nicely with It competition sounds and spares. would for and of be business the going is not more sequentially constraints touch of activity as aerospace to just the were little hoping MRO itself you expansion lack bit GD always But MRO. see challenging market aftermarket year-on-year, out. consistent

Patrick Dempsey

it's our think basically down it's of that slightly Myles, I think I in -- couple timing No, a we sequentially. saw sales percent

However, our the quarter. X% in orders were up at

So April, what strong of the then a July. and we saw dip course over was May, bit May a of June, a a a was a continued into little bit strong strong in a dip that's -- and little

But So we the nuances going what's think, nothing, the other than again, more are just products of that think, weeks to see and I we coming year. the -- coming just move with of it's the and as volatility is natural happen, we the the than an going to to shops aftermarket to over through see sequentially quarter-over-quarter upward grow and nothing trend, as continue I nonetheless, in months. how

Myles Walton

really look outlook your And that right? for this year in, baked didn't the year, MRO for change, full is Okay. the is that

Patrick Dempsey

first strong year year. fact reason course, as XXXX. quarter of note And our started the a digits, that, a a had also, single in inside I'd you which we is down for low full then the consistent primary And the No, that where recall, strong MRO we April. Yes. was we of with to bring was Aerospace, -- have

saw hit April, the off tailed pandemic it year, in strength the we As continuing before last May. into

pretty on as had basis So that well. you tough a year-over-year a was comp

Myles Walton

much maybe around is just that? just the quarter can for the on provided, concerns supply expected numbers reference chain the million that? maybe -- more inflation you the maybe of year, it. some you inflation million contextualize And than the $X you how Okay. particular, And much of the How rest that and in then and in how frame $X.X much then is

Julie Streich

year. to Myles. Thanks, anticipated full million of that closer been you a quarter to now from we're $X if what of be Sure. we've off had our And first year as recall backing And slightly inflation we experiencing. might result the for call,

So with year-to-date is I we've year. we're in line half more the but bit the would expectations, say a second optimistic into largely of going experienced what

Myles Walton

working I or then only is, And up Okay. heard and working than the I than little raised the bring capital the you materially capital to But I'm to is higher XXX%. XXX% the half. something in you've than opposed unclear XXX% conversion? the is second know right unless on But X guess cash other on I a number big greater there's build, as greater XXX% And why -- a flow.

Julie Streich

something to line we're rebounds, than cash as of and at to maximize I'm cognizant business need aligned love to do materially be our see in that thinking capital your clearly, XXX%. we Well, of we'd the certainly with higher working to comfortable or some conversion. strive But And build XXX% greater. going are therefore,

Myles Walton

Okay.

in anticipate working relatively that the right? that Is happen material do level allowing some half. you of are least capital second or So to build for at

Julie Streich

Yes.

Operator

the next from Securities. Ciarmoli Michael comes question Truist of Your with line

Michael Ciarmoli

Maybe than mean both incrementals, at segments. took Aerospace guess, X%. margins in just down, step the look a less sequential I I

You how the Aerospace just about color had what's kind of you with happening MRO. and carries than spares that? presumably on we give margins which higher-margin be thinking us the improve, Can should

Patrick Dempsey

Sure.

of which given grow being aftermarket, aftermarket we've obviously, with operating And mix that higher-margin. suggest, first bps in XX% the XX because was concerns full would guidance recall, of quarter, The a XX.X%. gave what reason if we full rate So OEM XX.X%, was second the performance -- we you down in in had guidance was between our XX.X% you versus quarter. as to indicated that we're And the guidance would over for just year noted, I than the better the then margin some quarter, first the year.

upped we back, depending It see our significantly XX% depends totally And number we that actually the mix, guidance on and between rate of upon. which the for with could the now clearly, back and year. for year the half that comes rate in on quarter So which aftermarket improvement over Aerospace. finished have XX% the the at improved the of aftermarket be recovery of XX.X%

Michael Ciarmoli

Got going the it. pull-through, mean the than the to you parts guys see I commentary GE, if be from, MRO? looking And mean, I bigger clearly, for the from mean, at I we that's lever

Patrick Dempsey

clearly Spare side. we that the another and sequential -- area mid-teens on is in saw nice Parts Yes. the improvement Spares year-over-year from

So that -- that be into bodes a for a well. see well clearly, business the as side shops, trend to see And the to the of side continue this repair continues the And come we of also course, improving. we'll nice the margin business as repair engines improve.

Michael Ciarmoli

you ease it. then think I'm that a start the margins. And guess you supply the of you guys related raw the these I of the back inflation can here? kind trending And quickly how from But trajectory chain, think should kind I showing help. Obviously, supply Industrial obviously, Got investments, recovery once materials of margins? of bit, just the up I we been investment, of have mentioned costs, chain you thinking guess, Industrial should when do of really mid-teens. some levels mean, about benefits and on those the the the items sort

about overall bit? cadence subside even Just a and the how the should maybe when investment think we does little

Patrick Dempsey

healthy you highlight as even what on back that now margins, think what It's pre-COVID I compare Yes. is if about performance. right is still them which And I question. weighing -- a pretty our to is where would great Industrial

seen sales in And we higher in XXXX remarks that the Industrial my than had quarter in total we referenced prepared did so QX of COVID. in before I

below our investments of the that into side QX margins XXXX performance in just Our being as made are with business. slightly significant Industrial of well,

we the excited that technologies areas build team making that XXXX, the our to of continued opportunities Hub, the developing. there primarily announced momentum has and those launch key are and year, are the that about Innovation the we're of investments last So into we're

the The basis, parameters is full Secondly, year, basically sales. first into as it improvement a with the it And the seeing whilst X the in the way business. year. tried that. And I'm segments obviously, allocate And last those how year built last where very is This it, personnel based put the obviously, quarter, we've we the inflation mentioned, we're comp, guidance mentioned year-over-year and is some particularly in parameters a X. costs we to thing pleased pertains team incentive on just to for -- the on I around out pleased I was to managing factor. our

so And year. a wage little will the move taken Aero that rectify and through forward Industrial more Aero as bit has being back, down, with this comes of well the as and year we self

making. target being of margins continue just and would the investments we're still with And margins highlight I focused. the offset goal So that the with our just some our is of sequentially, to we're mid-teens looking Industrial -- the team so much Industrial where is very improve for to underlying the improve, to

Michael Ciarmoli

just Julie, housekeeping. a it. Got

you for to shake to, million? year I expense $XX the out interest was said, what think going

Julie Streich

million. Yes, $XX

Operator

the of D.A. comes Our Davidson. next question from line Summerville with Matt

Matt Summerville

total Industrial about put company just was Mike with a point Maybe little what incrementals talking XX%, first on finer at at XX%.

you you you million, business, out the would that incremental $X.X increase investments, more surprised -- seeing the granular growth how know half? should better materially in about a right can incremental little on volume a we you're I can they if I little incrementals maybe driving mentioned that you you get higher basis, back pressure, than and what input that think mentioned cost running we were little now. to some a guess are what's an exclude on but I'm the through Given get that is parse that. maybe bit But

Patrick Dempsey

Yes.

technology terms from primarily operationally. underlying focused our a strategic as perspective the And a of businesses Hub for look today Industrial that see I particular, as our term. at to -- is pointed long doing Molding quest to I our we confident waste. in look on whole the the a I term, from initiative use pertains The internally, and provider Innovation to there, we mid major the areas at flow-through reducing it incremental how those plastic long I to that highlighted, of and Hub, for the business, the Solutions, remain So and and that technology incrementals, continuing occurring. see digitalization, improvement as in in that of investments the it long that we it key that the are what investments become very out, we just businesses area around we're highlighted, And are -- solutions

looking growth. as of leading so position strategic things side we that, solution resources that in streams as that have future services the projects And And we've And investment to recurring continue the and and clear move in we're again, the opportunity success. space, opportunities revenue be industry The short And last investment is on return we -- think the smart on being then be and digitalization expect of key terms I there, a significant towards ourselves future. for street, create I sales where to the to we see the a around, there, future. breakthrough to in a in within the Again, marketing future midterm working making, provider more can side number added that see that another key feet connected. of in and we highlight products talent with is well we're which of marketing. to are and as that to is there, more to our what a as salespeople our on,

a on a just also, out shift parse it's clearly I little incremental Matt, it as well. margins of the mentioned in the allocations they're what's and externally you to Industrial, if weighing, So as bit

Matt Summerville

-- I well, might be maybe Patrick. as So helpful, it

on 'XX? growth year-on-year to basis business, Industrial you how relative the say investments Within 'XX much up related are would a

Patrick Dempsey

would in I million range. the to $XX say, $X So they're up, million

Matt Summerville

at a Okay. it. And Got Industrial follow-up, book-to-bill then X.X. as

with recovery, kind surprised maybe trajectory the at Given higher, we're a it's some where Molding. of little in the of not I'm lumpiness that's

just can So about are that? that? What SBUs maybe little Maybe trending you that little above talk bit? a a trending granularity there. more below What's

Patrick Dempsey

surprising a which primary business. think -- the highlight, to I But is were the I is that Mold or bit in that of seen Industrial remarks, about lumpy. businesses times. my not did be as suggest a in in from you past, the see we've not they of something X something in range quarter, as prepared each Well, because within in of would medical And quarter-to-quarter tend orders that consistent the we little highlighted overall, little not of lumpiness the the is I side

Operator

Next from Skibitski question the Pete line Global. of comes with Alembic

Pete Skibitski

quarter. Nice

with So just sticking Industrial, you grew revenue-wise, XX%.

but So planned automotive a the heard heard We've having it's at about question, people of this shutdowns. hard chip we've industry firms. shortages the kind impacting other about ask in revenue and to lot

at sales end those So of wondering, from phenomenon perspective revenue kind I'm your far so just of automotive in impacted year-to-date your kind markets? a all have

Patrick Dempsey

is, have that they Yes, with the in million third about an we the impact and within production in is the million which quarter, clearely And our we've of outlook fourth predominantly the second impacted into $X million seen quarter. quarter us, what another to revenues in we've forecast Components. Engineered side, a $X in built saw $X

Engineered bit little the performance. So it Components dampened a

grown has that Components has Engineered automotive. of an and side industrial been top on dampening of offset to the the of that strength, highlight some from strength would effect the line to I However,

Pete Skibitski

Okay.

it impact Solutions really, really all, Molding on... more didn't it at like sounds so And

Patrick Dempsey

some No, the made launches Molding the model by to changes. that. think, new been primarily saw I end, quarter, in electric around activity the increased it that have Solutions, and they model that announcements the as new vehicles particularly, And to new pertains driven nice and

Pete Skibitski

Okay.

next -- Industrial question, me beat me let on margins. bit a the dead horse the So let little

half you're while, a year like the like down obviously, for even call And expecting, Industrial. Industrial it but a like the seems, it, be your volume will in to with took looks XX% margin it You full of XX% in second of year. seems friend modestly, in the it that, type

the to to just not XX% for XXXX? wondering I'm think you that back into to on and So type But is corner of reasonable is range, something that XX% XXXX. that about

Patrick Dempsey

volume of internal Well, driving. And at to of course would margins activities that we're going the the I definitely combination that year. the it's and be improving back of looking think half a I over the are teams suggest

a standpoint little So the enterprise an to And as margins mentioned, to momentum XXXX, move that again, that we we as you an and an improve also, back, the and obviously, from initiatives continue a mid-teens. back as looking driven bit Industrials result on uplift by I to a of expect, you build goal with being see improvement of -- we're operational will of both communicate Barnes said, then in continue The volumes. into system. getting to as and as

Julie Streich

And in it. sales since much driven associated the which that, was drop-through increase what by on would virtually of saying, no -- Patrick's in focus, million margin to build since with add quarter, margins FX has also Industrial remember, very are $XX.X I

contributing So that performance in Industrial. is factor quarter another in to

Pete Skibitski

last question, And Okay. That's Aerospace. to switching just helpful. X

would a good XXX I you On the think the at going is on I would the things think OEM having would Patrick, in much for not I lot OEM time. headwind you're Aerospace that think And program is the results -- that program. some on strong current that there. on of side,

Patrick Dempsey

what's we're volumes to That's we're moment seeing pertains clearly platforms. most at the it wide-body narrow-body is the as say driving correct. particularly and of -- lower I'd program. And the LEAP at all our activity

Operator

Your next with from Christopher question comes Glynn of Oppenheimer. line the

Christopher Glynn

outlook So you would big outlook. but like eat sequential I mid mid-teens curious, the look seems trend more and down down quarter quarter, the of in a that kind Spares at up teens, increase. up line first second in was the remains the did than the It

So there. just about curious arithmetic the

Patrick Dempsey

is as But the dynamics to And the something that Well, the traffic. you by cash. the I aftermarket. and moreover, inside some air -- outlook to conservatism going managing may of it driven they're highlight, be be of continue think is there airlines how for

I'd clearly, particularly here improvement The I event there. of U.S. laggard within, domestic marked a travel is the think that in of improvement, that. and upside in and So little been factors roll everybody about in out passenger seen traffic. the there Europe, bit vaccinations quicker play, has Also, an stands the are Europeans the a little be to Asia, also in that a marked a say, China, has number but pleased and a

through we sequential the back I in accordingly. in, of the question all increase, how see guidance we've So rate Spares Chris, the we improvement The and half in the reflected it is, gauged think MRO of and year. much that in

Christopher Glynn

run inventory the I I'm channel in of into my revisit spares notes. that Okay. easier, then I'll but some little front you Any And there, actually Yes, or volatility. comps causing get the that are a of on is pockets any of situated? think periodic wondering MRO if spares you how idea

Patrick Dempsey

view quarter course their down Well, everything did of all that well, reached that was bleed a conserving they or what Yes. bodes with to going second restocking. And airlines cash, inventories. that the end, they're within I think, the where to happened haven't power reach to pandemic clearly, over in of it the -- quarter the the to the in the point -- already they first

that, of on well so something known time a positive green I the to house, as run they've what's defer lot think, is another as And they've that them aftermarket is which probably outlook the side maintenance. engines, allowed of as

the the back going be as think to shops I engines required -- the and require that into they're to end well. pull run to of to

Christopher Glynn

industrial. Switching to

that Curious, a specific pipeline what both the of were can organic? play orders of up in the the acquisition, and a more on well operations organic sort little automation we that, said state around the did double You there, on Gimatic orders into digits. get and

Patrick Dempsey

Sure.

up organic XX% it of in terms up sales. terms well to I a into just put double of in of on north number orders north XX% organically the So that. It was and said digits, was of approximately up

a So highlight actually, the Gimatic history just quarter company. a within would I in quarter. And the strong of record super

just vulnerabilities and up virtue and of workforces. some I around in very to towards course, automation of team shift the in sector of strong Industrial So robotics And the a existing performance a part there. all that's driven, pandemic complement think, more been by the by wakening to a

each so driven that's and trend of into continue on going a healthy QX, markets that the demand to we And across expect forward. end

Christopher Glynn

I you industrial could repeat great. the updated that? missed Sounds margin, if

Patrick Dempsey

Yes.

full the we XX%. For year, to guided XX%

Operator

questions. this closing additional time, to the Mr. are there Pitts no like turn I remarks. back further would or to At for conference any

William Pitts

this with XXXX Angie third our would speaking Thank call. look with to We you, next you thank conclude all quarter and Angie. joining for to we earnings morning, you now us XX, call. of October like on will forward today's

Operator

today's call. Thank conference you for participating in

may your disconnect You this now at time. lines

Barnes (B) 30 Jul 212021 Q2 Earnings call transcript