- Earnings call transcript Q3 2022

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Operator

Good morning. My name is Chris and I will be your conference operator today. At this time, I’d like to welcome everyone to the Barnes Third Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions] Thank you. Bill Pitts, Vice President, Investor Relations.

begin. may You

Bill Pitts

and Good for Chris. me thank for Streich. Thomas you Barnes Chief Finance Thank Officer, Financial third morning quarter us Julie Hook, Officer, Executive our and With Vice XXXX joining President, President and you, Chief and Senior earnings are call.

If at the earnings section Investor release, you of a onebarnes.com, can you our our not of received website that’s Relations o-n-e-b-a-r-n-e-s.com. find have corporate copy press it on

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

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

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

will of updated third for to his quarter turn performance now XXXX. opening questions. the provide that, outlook for remarks will After for over me our we Let open call Julie our then and call review a up Tom the

Thomas Hook

everyone. good to and Bill you, Thank morning

held revenue, the our core leaders There performing deliver execution business at I To During processes to a simple team Europe line, required I and solid improve with And members improve during growth. manufacturing all of North team associates. That expertise appreciate in And of people, secure is good to pipeline our repeat in discussions full are processes. and commercial true engaged in across principles operating our visits. foundation the at embedded a execution and particular, to quarter upon is value This backlog and facilities build are taking highly frank needed. my at am is guiding and have actions passionate business often not revival. I put my we level will triad, portfolio businesses, Barnes. aspects said, hear Barnes, future to manufacturing it focus a traveled and our the America. impressed and in with company’s these clear is profitability our the terms, to which future. our our the Barnes we will me drive steer the the which drive top to bottom through line, first you

markets value. our customers. the customers. Barnes significant valuable to will markets our problems. to enterprise opportunities approaching price so beyond operations, by providing the of Our holistic leveraging value products to most first incredible our Doing more breadth are solutions With for address advantageous to to our we a to moves solve and in creating This is drive the determine that ways cross-selling serve, our serve efficiently allow while customer command more there effectively step manner portfolio

line along growth M&A in with with independent portfolio recovery more strategy and into through a we immediate priorities strength, pandemic aligned highly well top integrated been and the have inefficiencies approaches Accordingly, military targets greater to of expansion are scale At opportunities solidly and global as dedicate industry while pockets the And brands and side, and built business our top aerospace alignment markets evaluate effectiveness. and of participation will that investable, its level complexity. global are a a Barnes business MRO. Aerospace. we On industrial, has different. The It’s in resources performing in and this further has to of to there and decentralized led has the high space our integration exposed mind. this gaps to

call, this more Bristol segment. and So integrate, at M&A until the streamlining is business earnings Since activity, the have are announced view our rationalize an to with our pausing the tracking we To our business. that second of of efforts. call simplifying on plan. and on industrial a evaluation end, fully architecture facility This advanced we quarter restructuring this closure time, our we July’s includes consolidate within

We have of in closure our commenced by Molding Switzerland, which facility be completed June will the Solutions XXXX.

and We have headcount several Canada, Spain closed in have we undertaken Sweden, and reductions Germany locations. smaller

drive In savings second annual $XX million million in Collectively, $X multi-phase in restructuring a total what will $XX addition, of approved with cost a savings we in with cost we our announced we million. annual October, of $XX at July, which restructuring million. approximately round the anticipate of of

refreshed of clarity run-rate to additional approach candor, XXXX. the be both the at Plans above, for action. full hand expect will and and savings culture, restructuring in on course. shared in development organization with due by With work we We actions a achieve are all will

we of respectful moving existing greater and agility company’s culture, the are While with urgency.

focused things on done. We getting are

a decision-making we We This pay-per-performance it. organization. are And after do mindset support some, analytically into and our for deeper getting letting data to driving directness are the we is we uncomfortable in are a speed increase and more processes. driven, have lot but

as X-K of related voluntarily has has Vice voluntarily morning the remarks, our may from for family of matters Executive retired his I and in prepared my affecting personal that have close that to role this Patrick the resigned seen a member he Barnes Chairman a Directors you Dempsey Board reasons as health Before also member.

family position. of our I are to to and contributions the leadership company. working our by to towards in drive see growth, leadership team well flow resources capable his will inefficiency. thank transition to The line core to line and that From and address Barnes unlocking future for and actions my top counsel. orders deploy I truly industrial Barnes. ahead Patrick’s years of CEO is potential, next the the financial In Patrick and These energized delivering complexity over align I phase and for team, I his Patrick designed and and returns support like rapidly recovery, this entire grateful performance our incredibly his business appreciate accelerate steady improvement, I incredibly at Barnes the commercial closing, would bottom XX are Barnes work We of. his we full advice am actions the life. wish Personally,

over call a quarter and for our Let some to me Julie performance discussion end market color. now third pass on the

Julie Streich

Good morning, everybody and thank you, Tom.

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

$XXX were sales the quarter prior X% with period, sales Third down organic year million, versus increasing X%.

Operating last million, $XX.X Foreign XX% impacted year’s profit from was $XX sales exchange million. negatively X%. down by

million $XX driven of million year per a versus Net down a quarter, net a a ago. borrowings approximately share average expense share, the average $X.X of quarter a an per result $XX.X income charges and down from year or last lower last adjusted $X.XX decrease a restructuring incremental million, basis, million charges by from $X.XX $XXX,XXX operating or versus net XX% Excluding million $X.XX of XX% year. of of million, $X basis was ago. $X.X year operating compared ago. was approximately share rate to million, million $XX interest year restructuring In margin points $X.XX expense lower both On Adjusted primarily adjusted restructuring XX.X% for was $X.XX from per income was $XX.X excluding a ago. $X.X interest pension as expense down was this XX.X% of share Other from per actions. year, XXX year’s was the income

for adjusted third our restructuring was quarter Excluding XX.X%. charges, the rate tax

the For year related foreign full earnings of goodwill effective and impairment goodwill offset with Italian the and items for partially in were XXXX basis full a not deductible year to ago X year’s and year’s tax jurisdictions. tax realignment this was increase low XXXX, XXXX and in which These first rate is between XX.X% compared driven the The year-to-date was year change XXXX. the the and from benefits XX% XXX% rate high mix of rate last adjustments. intangibles a effective a months by tax audit by charge, of tax the tax

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

sales foreign Organic $X.X sales $XXX a ago. quarter, sales unfavorable exchange Industrial’s $XX.X by while down ago. profit was third X%. decreased year the year For a million million X%, XX% million, versus operating from were lowered

down was and was was lower impacts challenges of million the in XXX of and operating charges lower current Adjusted part operating adjusted profit points. Excluding to volume, million attributable of operating restructuring inflation. impacted year, productivity margin chain X.X% of supply $X.X adjusted down XX% in basis by sales net profit $XX.X the

quarter, we utilities million the to able net Industrial gross approximately across pricing million freight $XX inflation Through For million impact. resulting in the and in we inflation. were approximately material, procurement incurred a and mitigate raw actions, segment, ongoing $X $X

Across while net the end saw third of of very Book-to-bill were a bit automotive respect With quarter. was year-over-year a Organically, orders of to and packaging care Molding markets, Industrial and For excluding year-over-year strengthen were and fourth orders foreign we for organic sales X%. businesses, strong. impacts in approximately quarter, across strong, relative XX% decreased sheet sales significant metal flattish, forming was orders increasing There medical. $X.X personal anticipate our X.XXx in orders organic Solutions, automation inflation million. we impact the were while at the exchange. orders softness

to from continue X%. softer single-digits. growth & organic low sales our low organic recovery sales saw organic orders XX%, down we mid performance the We up anticipate At cost positive provides were is organic sales growth to for organic than sales mid quarter. low to flat. primarily Engineered Full approximately prior and expect single-digits. X% up the and At some X%. view. increased declined organic Automation, organic anticipated were The growth year XXXX, organic Components orders X% Order be efforts. sales Motion Solutions Force For driven fourth heading year, is is single-digit momentum bit a organic organic sales sales which into Control, increased to Molding while up be were orders to

organic XXXX. flattish for in expect to continue We Automation sales

expect to continue we For organic also flat this sales. segment,

We prior business aftermarket At industry. where ago, from have to year in profit operating adjusted the continuing commercial benefiting the X.XX%. as primarily up expectation sales Operating clearly up aerospace XX%. in period. million, compared business to the margin grew was narrow-body Aerospace, the is of XX% recovery X.XX% strength driven This year from million, $XXX range sales by tightened were $XX.X our a the XX% to

due from XX% the up in of a labor margin favorable adjustment particular, higher book-to-bill profit adjusted is with in benefit profit robust OEM in of XX.X% productivity of operating unfavorable chain last XX.X% $XXX,XXX, challenges. aftermarket Adjusted from pause. performance $XX.X consecutive business, was year. operating after restructuring and sales Contributing the availability basis in and operating last supply took to two points by Excluding orders offset increased quarters to In our volumes adjusted a million excess X.Xx of part sales strong XXX year. of

we Third book-to-bill though X.XXx, and timing see that item quarter concern. as nothing a of was

Our at declined as quarter though the slightly second million. remained backlog $XXX a OEM from result, solid

over to of months. this expect convert the to backlog We XX revenue approximately next XX%

MRO sales outlook growth see low for up spare growth our parts XX% XX%. we as remains OEM up from is aftermarket, with In prior XXXX. unchanged double-digit robust view the Our and

compensation forecast For XX% XXs sales operating The aftermarket XX% even end, for the percent drivers generation positioned in over $XXX million XXXX. to cash an related between end now period. in team Barnes operating of stronger continues capital growth of margin strongly year-to-date paid to cash, parts versus and With reflecting increase lower be The respect activities foresee Aerospace XXXX. higher in perform provided to expects to the the MRO was expect and contribution. the year, for to primary we the adjusted and up Aerospace $XX XX.X%, million now increase cash working an sales, incentive to and the low by XXXX. year are is year well continue spare prior bottom

built we As combat as chain supply stock constraints. discussed last increased to quarter, inventories have buffer

net of balance the our sheet, On million, just a debt-to-EBITDA to will flow end a was expenditures over begin $XX credit quarter With and ago. basis, was defined quarters, the under $X a ratio, be XXXX. will $XX million last by from cash down for slightly several debt-to-EBITDA inventory the $XXX million year year. priority versus under bit We it million wind end, the next we’d Free down X.Xx Xx. quarter. approximately Capital were agreement as focused a second at our be down from

diluted third XX million shares end shares quarter approximately both average shares. Our outstanding period and were

any million During repurchase X.X the and under repurchase stock approximately XXXX available shares quarter, we Board’s did not shares the authorization. remain

updated is adjusted which points million, throughout a of the is be share. we’ve $X approximately of our view, now third lower X conversion of the In we and per restructuring low impairment be $XX to of to supplement, our of XXXX Aerospace for is prior approximately A to million cash X% trends given for Aerospace rate challenged $X.XX from on sales be higher the and other Excluded of seen performance. per items. our outlook anticipate anticipated $X.XX of of with organic margin EPS goodwill quarter, range XX share, to we end the to the in Moving XXXX other Slide XX.X%, average impact and in and million an anticipate X% down and $X approximately G of forecast expect approximately between the approximately Industrial charge of performance Reg effective our X%. the continuation XX%. to our strong our tax aftermarket. up EPS the $X.XX year, we excluding Industrial previous although on We $X.XX Adjusted up earnings to continue shares expense operating with outlook FX XX.X% basis items, for of primarily now from closing, expense segment negative than Adjusted is up X% CapEx a of impact $XX.X range XX%, strength a few million, second X% taken adjusted XXXX on experienced approximately diluted $XX a associated quarter. interest to

structure are his actions competitive in started and comments, agenda underway QX many under address cost is and articulated in There evaluation positioning. Tom to change others As that our progressing. our

delivering on the we business call open of Operator, to our questions. the We Session taking are steps necessary laser-focused and now process. the underlying accelerate the for value will Question-and-Answer

Operator

first [Operator from Wolfe question Myles Research. Instructions] Walton Our is with

open. Your line is

Louis Raffetto

on Good morning. Louis Myles. for Raffeto

Thomas Hook

Good morning, Lou.

Julie Streich

Hey, Lou.

Louis Raffetto

you for Tom, with to you. speak color. Julie, the nice thank

margins just mentioned you go else been supply to in They I again. and – guess, I aware productivity back So, maybe would and just have can be stronger. the the Aerospace, Is it given will the mix I guess, to that the sequentially anything build, of? chain thought or

Julie Streich

issue contributed to attributable It some supply that is our there the little challenges. that. OE bit And also then chain a of partially was of in to a business mix

Louis Raffetto

then Okay. and sales of that, the stuff there of Great. just else said nothing well? timing on be And sort like slower you given mindful orders the and the to backlog as

Julie Streich

No. No.

Louis Raffetto

the I from OEMs, seeing guess? you’re Nothing

Julie Streich

No.

Thomas Hook

opportunistic. I a think rationalizing the OEMs the to production are than schedule rather realistic just

And underling. so there is rates other there really normalizing the nothing than output

You were linked to that very tightly.

Louis Raffetto

be similar was comments it this there. I production heard going also people And see some could sure CapEx, of it the you’ve where to I just just thought that? just wasn’t lower that. guess to then that starting like us seems if week were did being And – things, out rationalization necessarily And or we not you in maybe nothing Okay. the pushing guide industrial be just about anything margin administer? the obviously major give so again,

Julie Streich

slowdowns which original expected. up into some trend just the suppliers not from lines is is just in it’s on on equipment seeing been actually that next our – CapEx year. we’re yes, where So to a time equipment what perspective, we are they the That’s have order, cash living of delivery a pushing

that margins, being investments your question business. concern made are nothing of So then was or actuals the in outlook? the Industrial the still for on And and

Louis Raffetto

just – I I was if you for know it [indiscernible]. I Aero, Industrial outlook. for don’t know gave think The there one

Julie Streich

yes. No worries. yes, Yes,

year Our for the outlook to full the industrials X.XX%. X.X% for is

X.XX%. didn’t to we the range. really X.X% It that So tightened And just change midpoint.

Louis Raffetto

Perfect. you. Thank

Julie Streich

worries. No Yes.

Operator

The next with question Glynn Oppenheimer. from is Christopher

open. line is Your

Christopher Glynn

great about in in I Bristol, I one are and terms being you the for divestiture the But have thinking you’re side portfolio some, actions within the and of some any leave there. I’ll all intentional mix attrition Amidst attrition the of levers? the transfer thanks. exit? Industrial mix revenue but know you’ll explanations, intent some looking issues as Yes, Tom, now. you shrinkage, taken at curious to maybe think opening closing probably

Thomas Hook

kind a volume. are Chris, great insights high learnings question, Yes, have of lines things in at tail we particular, deep of the mix that really Moule that’s and product product as the my portfolio Industrial Julie is business Steve to and that is part and low evaluate the garnering and into with look

consolidation this rationalization. doing we’re So

tail trimming order way in we mean, move of to the customers a We’re to drive, less balance products, be and is kind there remittance them going tail I the for would pricing trying – more solutions a turnaround that standard here. to a or in or faster are provider.

have customization, a of is we there and lot want So don’t infinite because it’s expensive but slow. extremely customization to

line. tool manufacturing is and each X QX as with the active, realignment facility that during well. the Bristol well rationalization is just for It’s in embedded Switzerland as So both announced for the lines as that using restructuring product rationalization we’re there the product as facility And industrial announcements as into is well the a projects Phase we at the consolidations.

Christopher Glynn

Okay, thanks.

at this the of on discussed some And not I point, what lot of to such ‘XX going so or we’re just know you but talk table. guidance influences, as a

more organic ‘XX thinking backlog of some growth. with at refill be margin maybe to modest So point? year you Should this bit? drive maybe levity, maybe conceptually, a Granted and come information a on declines a mentioned focus we revitalizing bit, little, to

Thomas Hook

to days XXX only guidance. that it’s get of CEO little a ‘XX as early Chris, Well, a

revenue transition my core Industrial with satisfied in focused and not grow are we segment declines with Industrial. accepting we heavily for at Patrick XXXX. business that. execution will and be in arrival opportunities Steve demand Dempsey, Since our Moule I that Julie our I However, on

into and remittance segment. to it accept through get process. that win we’re book P&L the it in We orders going business in have Industrial order shrink XXXX to But I into our won’t

Christopher Glynn

on I am then comments? the And you further it And been elaborate acquisition MRO. could you targeting bucket have space, one Okay. military might on that at targeting and I Aero, I comments if think related, have mentioned wondering of into in expansion that on looking

Thomas Hook

performing the at Aerospace improved period through currently, leadership Certainly. It during efficiency is COVID is through the business Well, operationally. I in quite level high effectively. find our a very and prior managed effectiveness business and its it actually COVID

So coming entertain it’s our really targeted under momentum expand would of have they use his where capability. in M&A and feel and OEM, naturally can picked We but we strongly business we’re military him, very through COVID that that run is we well a each its operating that leadership, complementary and to because and leveraging for lot opportunities, of be out opportunities portfolio. can been that those feel also we up evaluating commercial also we’ve capability of MRO recovering we segments, organically MROs that into

I done on – right and that market that also, of where Aerospace our But we differentiation that particular, decades. So for think evaluations acquisition have into still consider in although into Barnes competitive now. opportunities in within the us, aligned potentially – has very – And organically could we disciplined to we’re open customer prepared well projects very have operating up we not approach also think a investments are capabilities extends market. into for in those aerospace we’re business the being We couple a that. is of

could a as segment. I broadly at profitability they we’re on. and to feel grow trajectory already us investable continue we aerospace growth is So to looking the where that trajectory – very very And it that think we are for

Christopher Glynn

could I the one is one. do if pipeline How Sorry, looking? last

Thomas Hook

healthy. pipeline in The aerospace looks very

to actively been right recovery have have areas. production now in be some particularly arbitraging locations has certain We out, pointed we Julie the that effect. to would limits, continued the where as a have labor longer operational we in availability better time. still mitigate going to to But aisle, able obviously, expect, robustness also labor over is availability we think been complex is that in the of market. occur I period single wide-body I aircraft say the

we not we be we But confident is their get could demand set robust. feel our opportunity faster. the the and now, patterns. as would in of if right more there trajectory growing And customers So, very out,

Christopher Glynn

I Sorry, pipeline. deal that. meant with I all the agree

Thomas Hook

is pipeline is So, opportunities deal side of narrow of there the being very plenty we terms in in are focus. our

focused mostly the individual on But of on mostly handful assessment on performance are organic a So, aerospace it targets. business we just core phase. But targets at looking side. or is the

aerospace COVID. through think I similar to They difficult other looks through business companies that aerospace times. went our many went that

could So, fit targets there that with that targets is plenty us. strategically there we potentially – fit wouldn’t is and really of

lot we of the right terms run nothing really a of communicate going So, evaluations aerospace, in deal to but to are that now opportunities.

Christopher Glynn

very you much. Thank Great.

Thomas Hook

Thanks Chris.

Julie Streich

Chris. Thanks

Operator

is Matt next from Summerville The question with D.A. Davidson.

line Your open. is

Matt Summerville

morning. Good Thanks.

Thomas Hook

Good morning Matt.

Matt Summerville

have that Realizing – some be question. to I that might Tom hey that I the might Realizing this listening. comfortable am ask internal Tom. make this people, might make

there have What team Where to of therein? days. assessment gaps? is your you You effectiveness change the doing at leadership are are finding to as what here And been affect you the Barnes? XXX

Thomas Hook

never question. candor mistake effort a Yes. a in for I fair and No, communication. And lot that’s of results. believe I

industrial particular, in need performance our results dramatically. on Our to improve

we I have perspective, be basis. leadership needs started already a think leadership to that have a done, that on targeted from improvement

six like Moule, I good find XXX to know, leadership about months. talent into facilities a lot strong. the have leaders were days. manufacturing myself XX manufacturing here the of to think Julie As days leadership-wise of gone here deep comprehensive on senior months, I many there the very in I has to garner insights do new. business, visits floor. very years reason, you XX fairly X in Steve been are XXX is

leadership. from much commercial I impactful of stronger come a We and have leadership. background weak commercial

be XXX been of days. displacement in quarters So, reorienting and the the have have And those in the to progression, entire upheaval of I to we the of the several Matt, and that meant making these businesses. types a would due this industrial go-to-market that side, on the leaders of our first changes. transitioning here has quickly done course of it over tumultuousness view

it’s and good. that on Commercial focused teams, with manufacturing executive very in in working good I Steve aerospace, It’s Julie, Moule So, leadership a industrial. progression operational teams, The aerospace. do. Edwards, really to very more am Dawn on is leadership

So, most occur I the references transitions of the will I of the think make would that towards industrial side on leadership house.

Matt Summerville

industrial And a just SP the your then early that as Understood. base on the view investment maybe your asset follow-up, strategic has picture, what’s business kind and operated bigger you upon, structured by which been therein? of

Thomas Hook

driving do that of the in and second opportunities make given way, taken. conference of have lock to cost to like the decide all year reducing these real the at approach July it a one efficiencies we a and and do that to time, the and buckets made then too to kind in in the decision phase. Phase much today. and I on rationalize, call and us second Too consolidate of out, we have complexity. realignments, second would aimed today realigning, the off and and announced and do communicating next a had the consolidation change really integration, inefficiency do initiatives of complexity part it is round evaluations the X quarter year, But we much the cost time the at And If second quarter of series that’s rationalization and in for today at phases. need this urgency integrate, were allows plan sometime

in a sound, forward, driving get And consolidations. that expect complexity are facilities industrial will additional very of that going doing that is facility but have have is better underlying end, that can a product resource too we don’t Because background facilities and on direction there addressing to of limitations in that be more a we effectiveness. lines lot opportunity, many my the have the are scale need efficiencies continuation on are a can we aggregated. That’s leverage the productivity. company. efficiencies and a phases There You at have how lot lot of a can we have don’t – this lot going. we a the to – of comprehensive fast within we do gain We as

by improve over an quick us series kind of more lot time, allow taking of simplify the the ability moving manner of industrial the And a but at the effective of invest progress give quarterly phases, us aggressively. get it, a will segments, quarter business to at impactfully us phases, kind to next I Hopefully, that’s these the it to a in profitability in XX more go-to-market let a to top months. in Matt. of dramatically not the So, chunks line only helpful, get

Matt Summerville

for, that ‘XX? am kind a I helpful, Well, The from one Tom. you realizations. that P&L and of bucket of is versus guess just can X Phase realized savings I And and of of cadence how looking anticipated kind Phase much maybe cost ‘XX more of follow-up. $XX will maybe be million X, the benefit versus ‘XX

Thomas Hook

Yes.

it the be answer do that, of able Julie to easily. that have on data me kind should forensics Let with that

Julie Streich

Hey Matt.

pretty when XXXX, de minimis you impact for charges. net the is So, the consider

through, expect run million and of, would full to we at rate be call drop somewhere we XXXX, the For it, to $XX XXXX. $XX million will in in neighborhood

Matt Summerville

Thank it. guys. appreciate I you, Got it.

Thomas Hook

you. You’re welcome. Thank

Operator

with Michael The Ciarmoli is Truist next question Securities. from

Your line is open.

Pete Osterland

Good morning. for Hi. is morning. on the Mike This for Pete Osterland question. this Thanks taking

Thomas Hook

Good morning Pete.

Pete Osterland

are just chain and how about I thinking that the as first, approaches. on the and year wanted your get So, thoughts you dynamics to later supply coming

able continue sense mitigating expect any get see are raw be building inventory would you if you with a cost to or if there higher that you trying Just are that for you materials pricing? to pressure specific for

Thomas Hook

Yes. Great question, Pete. The supply chain challenges continue to exist.

it’s of to constraints aerospace the inflationary lines, we in of still industrial working COVID. they – some as constraints levels focused labor we see accept by fully very and and inflation without of and own to the within a We mitigation cannot, company both kind are offsetting it bad see product do times but customers. so longer that We value We systematically those by a as effects partnership years with engineering and here However, doing as the goes pricing productivity abating, availability, lead brunt labors with was prior are it with our as materials of do – on the – heavily ways to from our efforts it late effects. as asymmetric, during region. that customers will peak customers but pass-throughs, our company, mitigate with thereby availability our in accept more

regions and So, in have less others. markets certain than labor recovery the availability

business. we been some arbitrage So, to us attract to level the labor we production can, using areas direct grow allows that have of where

in know, particular, in consolidation some being labor because consolidated you the with on into regards business up we are facilities. based those pick decisions doing in As segment, to the Industrial we availability in where and are there are work lot a expand making markets our to of things

are through the it programs. So, we consolidation addressing partially

I going forward, to XXXX. that there in be inflation Going continued expect is

aerospace, the have an full and of the the Moule for systems on So, was to very a And and mitigating rational we the focused with really because out learning continuous occurring. in the did we quickly mitigate were here for year is in for it’s not Ian time unfortunately, inflation the XXXX place at ongoing reason Julie, getting of terms on industrial very with because management Reason inflation Steve in customers and amount to secret mitigate it full Barnes, amount. of in tough late basis

inflation so have loop loop on to we be for on a recovery And don’t want that. a XXXX. we recovery And in basically been with

happen to the ensure prospectively. have will that not we So, does operating mechanisms

Pete Osterland

does helpful where any production most energy-related would Thanks. to facilities footprint your And the be disruptions exposed ask, I if risk specific situation be to of the you lines, potential production worsen would or chain curtailments the there supply Are any there color. in winter? over Europe? Very product elevated your within wanted where also

Thomas Hook

we mean operations our to Italy I a think that particularly are that’s I Germany for sensitive fair Yes. and is reasons. are question, natural that in

on So, factor. a use I reliable when think to a of as that if we aware see with alter manufacturing to do we more we is how of. But careful end don’t we Right something limitations, up significant our we somewhat is run the very – facilities be having in are teams to production now our basis. available will are going schedule energy somewhat we And operations. as terms to off-hours have plan it’s our

be nimble. necessarily are see issue. we an that But being playbook. So, from right contingency going don’t But we we have to now,

Pete Osterland

you. Very helpful. Thank

Thomas Hook

Welcome Pete.

Operator

remarks. Bill We to it no I further turn questions for have time. any of will End over at closing Q&A Pitts this

Bill Pitts

joining Chris. full call. February Great. like XXXX, look thank call. would Operator, XX, and earnings you quarter today’s next and we for with you you, now Thank conference on year fourth our XXXX morning will all conclude of to We us forward to this with speaking

Operator

call. Ladies and today’s for Thank gentlemen, this participating. concludes you conference

disconnect. now You may

Barnes (B) 28 Oct 222022 Q3 Earnings call transcript