Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, good morning, my name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Barnes First Quarter 2023 Earnings Conference Call and Webcast. Today's conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].

you. Thank now Investor over Relations. will Vice Bill the of President turn I to conference Pitts, And

You begin. may

Bill Pitts

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

at a on onebarnes.com, press release, our find it the If Relations earnings corporate O-N-E-B-A-R-N-E-S.com. you you that's our website have copy of not of Investor received section can

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

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

our submitted Securities to and part table find our of reconciliation release the X-K You will in a Form Commission. website as the Exchange on and press

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

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

Thomas Hook

everyone. Thank you, and good Bill, morning,

business exit XXXX, meaningful and journey. demonstrating execution in core focused Barnes we driving our fully and transformation advancement As on is XXXX, enter

in the about energy a remains first quarter progress am to-date, will performance talk considerable financial While our do. to and Julie with there few I moments. pleased work

There to consolidate, the products I corporate transition take segment to compete drive across we serve. numerous operating markets to rationalize streamlining to to costs company architecture. are a structure include levels the to this and the overhead holding company will as structured serve in and enable of at time more initiatives. businesses to significantly Barnes the like morning and more to address we rationalize effectively leadership of operating needs progressing better business These agile our overhead All meaningful from be integrate, support move will performance would the Barnes. actions underway a that

remains Our approximately X respectively. July million phases. we costs restructuring on of October anticipate and in $XX X and transformation execution for savings with Collectively, total Phases restructuring annual track $XX million of and these for announced

XXXX. savings We run in expect achieve rate to

generate restructuring ready facility final over and to and and now Industrial are Industrial will and X efficiencies our We Aerospace implemented of next Phase significant be address efficiencies to transformation announce Aerospace segment program. phase include of production will and globally. Phase X products the transfers months. will costs. our work These XX the reduce functional impact

Works in facility Council a at Germany. our engaged to notice we at week, provided Last employees of the and facilities second with German one

one to plans, in Italy pension were which benefit In the freeze from of savings they production elected unfold. provide work Some defined to these We'll transitioned further will program existing company benefits pension details U.S., its the locations time. facilities is the over as and with share China. associated

quarter, investment. incurred in be of the including to which $XX forecast is $XX X million, $XX of charges, million million most restructuring Phase for of and $XX of capital external investment charges, first million total The transformation-related were

we in Phase XXXX. million $XX For approximately X, savings of rate anticipate run

and time this to program, lead products to budget. resources dedicate of execution the we continue We'll on so deliver

operations will remain execution. functional Our core focused teams business on delivering and

the implemented. company's line with provide bottom is continue profitability deployment as effectively quarterly drive to each of transformation. fully initiative enhanced made can progress We'll the being With appropriate updates you resources, on the

our orders year Moving and the business by this quarter to compared at I'm Industrial growth organic ago. operations. sales encouraged a to

few Our business multi-cavity an benefited Molding performed areas Control growth our true The celebrate sales Solutions in top-line systems the and mold Bristol targeted our quarter. as in the a therefore, within benefit in ahead positives order see business Solutions, automation of which continued the well. stocking Motion is well, second same from and We'll at to plant quarter automotive closure. customer a

for was in particularly product hot performance Molding asymmetric soft. within sales delivered given organic we runner our lower line automotive However, our China quarters Solutions.

though the sales impacted product generated organic Solutions delivered ago. metal a to this in line. The lower market in forming sheet orders, organic increase modest compared Control European a lines Also, year Motion product

line, margin Regarding Industrial's modestly year-over-year. bottom adjusted operating improved

our remain expectation. clearly a below pricing hold pressures Positive inflationary persist. margins However, taking difference, but and actions are making

higher an on and systems Solutions, had detrimental margin. mix lower Industrial's of Molding mold hot the with Additionally, unfavorable impact runners a

To commercial the a business first feet investments our Industrial units XXXX and is in sales that to deliver being the made funnel across strengthening address step. expectation produce pipeline Street building all pipeline as to the opportunities, on are sales growth

The generating ahead platforms. across businesses wide OEM the the and strong pipeline Aerospace, anticipate broad-based continues performance. body strength is on-time improving continued both deepening At We single recovery orders plan. with orders delivery operational for and order aftermarket with relationships of and customer aisle

outreach have and is trends re-energized existing with Aerospace avenues customers. growth commercial both industry presenting favorable. new been our Additionally,

XX% the year XXXX likewise February With ago of Air Transport travel of XX% February. at versus region XXXX rebound. traffic and more February a With reporting a Association, reopening, has XX% over Airfreight year for China's International domestic was global Asia-Pacific levels. IATA seen reached strong up XX% saw levels. approximately in the International that a recently improvement ago, than up February was has and sequential nearly metrics versus

both demand OEM trends solid aftermarket and to point improvement. favorable support and businesses. the concerns These are recovery view travel regarding to air there continues trends While global economy, further the for demonstrate our

we're we and initiatives the solid growth top-line, solid With bottom driving operational management improving revenue execution execution productivity with efficiency. steadily and see generating line improvement. respect to On profitability,

Some is performance delivering universal. recovery though at of our this not pace, are facilities

The a operational there additional performance where good is percentage news team especially targeted, significant is and site within improvement actions facilities demonstrating productivity of is that each are newly members. hired

competitive In of addition, through business. we contractual mitigation ongoing Overall, actions. recovery of Aerospace inflationary other pressures the expect I'm our performance positioning with and pleased price and

moment to on Let deployment in our me capital a take portfolio. comment

more That ongoing our strategic previously opportunities in products. core Industrial of business remains businesses, we fashion evaluation continue until execution more brands, stronger M&A As to compelling identify portfolio Industrial via activity of and discussed, enterprise value consistent. a said, to paused is and drive

strong M&A we evaluating strategic Aerospace, on Within targeted opportunities cost fit, are with with integration revenue assets post-close significant synergies. and with a a and focus opportunities

to our his Before Steve has like leadership in position concluding, I have as Segment resigned joining since week's last XXXX. you to well team his Moule, Industrial Steve Barnes a Barnes at know may new position. President Steve I'd another in announcement, seen his and company. role contributions us accept with for wishes thank to the

execution and on we embedded highly closing, our in strong focused leading full the brands value In driving of and core business delivering technologies. portfolio industrial stay

and into moved past transformation has planning major execution. Our restructuring comprehensively program and

of enhancing and key this are committed performance to to We initiative. financial deliver and operational the savings benefits

for as performance call me a discussion the now over well as first end market Julie of to Let our quarter some pass color.

Julie Streich

everyone, Good Tom. you, and morning, thank

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

with First sales year million, prior up were period quarter sales increasing organic $XXX X% X%. the from

X%. by sales impacted negatively exchange Foreign

share operating $XX.X this was to million share of On or income million share and year excludes restructuring up $X.XX or in adjusted from operating $X.XX was Adjusted XX million million Adjusted $XX.X net income up net was share an year, $XX.X an transformation-related year. of $X.XX $X.XX diluted Net basis up was a points. margin income XX% diluted adjusted XX.X% ago. the last first quarter per per income charges. year XX% of basis, compared last of XXXX $XX.X and $X.XX from adjusted per per

major mentioned we we actions, expect for with turns of and X As announced Tom what the today's execution. our reached now have actions, to Phase focus transformational end

Interest $X.X income Other in interest million primarily in expense from year, increase last increase million, average due to exchange part by was was an offset $XXX,XXX rates. $X.X in pension non-operating down an of by $X.X expense losses. million driven an increase foreign

the quarter than the tax XXXX is XXXX is rate XXXX. the XX.X%, in decrease in to first quarter rate line to charge due impairment rate the of for deductible XX.X% comparable of lower primarily in XXXX, from which effective incurred first a was purposes. absence for full-year book though in The essentially not last year, The the period goodwill the tax tax full-year effective

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

foreign $X.X $XXX Industrial's Organic million, were increased year sales million by lowered exchange sales the X%. sales $XX.X million while versus For X%, ago. X% the quarter, was profit prior first year unfavorable a up period. from operating

$XX.X and positive charges part lingering $XX.X up mix was impacted million adjusted basis of year, Adjusted was inflationary operating Excluding profit operating and pressures current profit and million of in of in X.X% restructuring operating up was the XX pricing. adjusted margin offset by XX%, transformation-related unfavorable points. by

the increased orders to Solutions quarter increased while sales Industrial X%, organic sales businesses, orders respect for across and With our X%. Molding organic

by the driving Our strong sales. care, end medical were markets. end packaging, and and product in with the Synventive automotive part general very personal product runner weakness in multi-cavity hot line our markets system line was driving industrial offset These mold orders serving

up Molding expect sales and Solutions be we mid-single-digits. organic total to XXXX, For

X%. by were while market. transportation-related and quarter, At Motion softness sales in Control end tool grew the by saw intake die saw business end Solutions, orders organic XX% the organic while strong in markets driven up we orders organic The

We XXXX. mid-single-digit organic to and sales expect growth see in total MCS

X%, X%. while orders sales Automation, increased At up organic were organic

We expect in Automation high-single-digit for organic sales XXXX. growth total and

prior between XX.X%, latter overall sales total the anticipate and from and segment, XXXX mid-single-digit organic operating slight uptick margins growth X.X% a For with we view. our adjusted for the

with OEM sales up and XX% robust ago. were strong XX% total. in our from XX%, growing Aerospace $XXX a year aftermarket remains sales million, At were sales up

$XX.X aftermarket, spare profit were XX% was up MRO and up Within XX%. XX%. parts Operating the up was million,

was transformation-related the business. million, of year. the charges in strength adjusted operating performance profit profit and the basis is of from XX.X% margin operating up million, aftermarket $XX.X up Adjusted restructuring adjusted XX Driving last was points. of Excluding XX% $X.X operating

outlook. not prior consistent get rest the expect and robust. of our rates similar was will the Keep Our year-over-year quarter quarterly RSP levels year in tougher solid growth the spare in for prior as sales we business XXXX, the be while mind, with comparables parts

OEM In was our the business, strong in quarter book-to-bill the X.Xx. up XX%, and orders were

backlog was a OEM from and sequentially of by $XXX XX% ago. Our December XXXX year higher than million X% increased

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

outlook favorable is view Our OEM our slightly outlook. XXXX sales more for mid-teens, a than February up

of growth for operating spare view. margin our MRO for Also XXXX forecast adjusted prior low-double-digits XX% Aerospace XX%. forecast and For and is we consistent the of with aftermarket, unchanged between parts, our both high-single-digits for

$XX increase cash, versus provided in compensation incentive of in of year first year are working operating in respect the period. million by quarter change compared to With activities and the prior to paid to $X period. cash a million a XXXX The drivers lower primary was prior lower use the XXXX, capital relative

million Free $XX approximately year. prior negative cash flow the million was year. up $XX expenditures million $XX Capital $X were million a from versus last

X.XXx sheet, our debt-to-EBITDA we'd net the X.Xx. a position be at cash by approximately defined was on our agreement basis, our balance considering year-end quarter When ratio end. at debt-to-EBITDA credit With as

were shares and outstanding first Our average million end period shares quarter XX.X million. shares diluted were XX.X outstanding

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

X Turning our supplement. Slide of to

Let me outlook our XXXX. share updated details for of

earnings per to X% operating transformation-related low of quarter, estimate activities previous to related adjusted per X% expect margin first $X.XX, significant up XX.X% $X.XX exclude to we end to XX% $X.XX range the up the share. anticipated revised earnings to is sales the QX, impact This and from be approximately performance be adjusted $X.XX in for the continue QX. $X.XX X% In quarter. with in XXXX’s $X.XX expected announced outlook a $X.XX the from increase in adjusted the restructuring and to-date. $X.XX at range We given QX, recorded are With first to XX.X%. our to to XXXX, share the year, in an Adjusted between and of achieved in reflects EPS $X.XX organic of in

and shares environment. cash Other to A million $XX by XXX%. higher conversion $X tax CapEx few million anticipated to XX pension, million a million is be expense XX.X%, other a of approximately rate full-year diluted items. rate of effective outlook between non-operating $XX of average by driven of approximately XX.X% $XX.X approximately interest and Interest million, income driven approximately

our In exceeded closing, our quarter first expectations. internal

and QX. going year Solid the momentum begin into provide organic positive orders sales to

We are the the course the cautious actively plans over approve year, engaged is capital working outlook of global environment. the for the drawdown more remain in our earnings they'll and positive inventory team efficiency modestly Across of company, in economic to the year.

Now, shift to transformation we'll with and our from announced, creation we progress flow delivering and cash deliver. financial core the Doing focus to generation, program execution, business operating so of restructuring expect major phases we the value will initiatives. our and the expect the drive

we will now open the Operator, for questions. call

Operator

Instructions]. you. Thank [Operator

And we'll Matt take Summerville our from Davidson. first A. with question D.

open. is line Your

Matt Summerville

Thanks. questions. Couple

coming kind for fact start trying First the improvement four to feel for margins you're three been encountered or margin towards QX? a business, a I then I that straight in much savings of the the year. Also guess sequentially the function see of QX? magnitude trying that for have that business Industrial square I'm when follow-up. can we of benefited the that consecutive you. And have At Thank I'm range starting And the get inflation down day, step you quarters. may in to with is providing cost quantify to be end you what how the in unabsorbed

Thomas Hook

macro you that of There I'll with Sure. answer then a inflation give has through. of is follow come a lot numbers. Julie a let I'll kind and through

it first, comes then Matt, the into know, kind you As order P&L. the of through and book through

to book, offset through the and P&L, with QX of order that basis have largely of into our inflation But were We the able actions of the is half effect behind largely productivity the been we course into last over the pricing in inflation. through as we've second order coming the off into are on cleared Industrial, XXXX per book. in pursue a year

nine have move expectations the my the year that that forward. on be into into now I've to have forward, will taken months are inflation past pricing clearing we effect through six Board the that that order as over of ahead initiatives book going to But it's XXXX been the months revenue continues as

and behind of as So the were X it opportunity to we've positive kind have give inflation the remainder of in an on reasonable affected that of in initiatives you effect of offsetting like We job the think definitely of in effects the QX. and looks P&L some I'll for Julie QX, of said, quantify a X unabsorbed the quantifying QX Phase half inflation Phase what for XXXX. XXXX. I in done second

Julie Streich

Hey, Matt, good morning.

first of terms And to will in in and it's starting X in when run now. year of that of million to see $X through That we are second rate coming half starting in. starting quarter that So was hit the benefits than the P&L, largely XXXX. the we're flow X the the largely less quarter, in Phase ramp benefits in it

ramp to year. course a of we're of was de see the year. going the mentioned, start it we're that to But quarter the -- So minimis over slowly first going as I in the impact

sequentially, we've been factors movement a of And that. in of that margin terms there's to contributed seen that the variety have then

last quarter with in Going dip third at not what noise plant there dramatic some we QX, Then fourth the from in that in there. that portfolio. one-time Tom's across pace true-ups time the in we of still from QX keeping a margins inventory quarter. impacted QX year, going to EC, to took had especially there We in of saw coming bit with the that EC per some that QX a rest charge inflation a the inflation, the closures, with the but comments, out was only not were we happening, was of period was

stocking QX Synventive, to really impact some components, mix. spoke mentioned, about from be story orders. to the saw going it's The And volume then we historically as as In margins was to down. where higher. in have received engineered increase a an the down QX, as We Asian of was tended Tom market we

flows we us steady prior seeing that we in of over year, those margins is So steady see I in my start ebbs improvement. saw anticipate now this would and periods. balance expectation that year to the the will not performance have

Matt Summerville

Industrial Got saw the sticking European it. benefit especially about. tweet a a X prepared bottom top Industrial, go-forward that little more the not business. restructuring Phase an the can is just from either talking maybe give you Tom, know from like from cadence Phase And easy that's think for countries you standpoint. follow-up And as on sounded the And if about that and standpoint line it stocking in not then or in with a X you're as at a fairly your then order color context heavy the of least, we some in X of we organic remarks,

give kind the can. detail So terms talking timing Phase about we a cost extent of in of set number a X? and you are meet being about think What objectives savings with of Thank you forth the maybe little rooftops more from to able to both standpoint how you. and you

Thomas Hook

short Sure. going much think won't noteworthy order that -- to the for give the that. color product on Its that's good -- of we've We've break Bristol we're I that in retained is so performed business was really on coming move. out not is effect, it's the something with we time. a but that the It's too a now. is answer stocking that lot news the it on But customers well positive and

we margins that final of that through stocking there's period, this forward take moving going of the going them a do supplying small on But core they the go you facilities that because will forward some orders place reminder into be you future. shutdown facility. not as the plan before expected as revenue typically into is And orders

But wind of well, the in well, around mix, product order overall the that's shutting is of the more moving really the So we've It's step color products usually down comment down final lines. stocking effect give runs some indication discontinued the production is and it. for the of on the before of those you meaningful on an moving to really schedule. positive, but it's the enough final and last a not it's lot a facility

on It end on Europe global and Americas, the Matt. the in Asia, in in Phase -- rooftops China. and a is pitching catching affects X initiative, both

all are rooftops, initiative comprehensively of know, There to global you the we've I that the there higher are So It in our in in as Europe, these X European had rooftops globally. and that, at been handful there's facilities rooftops of volume a already that also this actions as initiatives multiple organization. are well involved. at looked we've affected there X footprint in affected well Asia. has as Americas, Germany similar capable noted across and overhead several in approach Phase where of organization as and are on are the in that overhead as Phase manufacturing consolidating levels facilities drive terms more a in

X as done Phase We've multiple and X in Phase So and X target. Phase is consolidations and of X already those doing in kept and Europe in balancing we've these nice despite products of to schedule time. over a job scope on I on spread very rooftop Phase out facilities Phase part and it X

on in achieving level cost very confidence savings we've the objectives laid out my is high. So

are teams. these have from doing office business business and transformation the separate a that They're We products. operational resources dedicated

I've used X. and executed we'll rigor realize past. and I a benefits crisply the the seen X of footprints will that Phase expect level be And the despite to X. that remain similar as in just in having affected, they we've used And as these very Phase Phase that what schedule European on So are is

are Just of and investment in like Phase -- terms and in Phase savings. X realizing have we timeframe, we in X

Operator

next our Christopher We'll from Glynn take with question Oppenheimer.

open. line is Your

Christopher Glynn

on restructuring; three at million are of and how curious was $XX component the you're What the the So about relative that? $XX for P&L you phases. what the the to the I cash -- for cash to hear about thinking looking investment spend million

Julie Streich

Yes.

looking the So at. $XX Chris, first impact will of net half be of cash that is year. And for what the year, will majority this hit we're the million this about

was the over associated its quarter the phases big is primarily. as cash forecast, another chunk half it there and back a trails couple So quarter first the off already year. then outflow of balance in with first -- the And QX

Christopher Glynn

doing and but ambitions three conflict the just across broad in then phases to enterprise, taking that it's I culture the times. oriented habits And the with will at Okay. a plan, overall look at think the wouldn't action what do. admirable not you're easy be there's

seeing So things up? of wondering responding anticipating how shake some you're you the and challenges what or as bespoke

Thomas Hook

this, the revolution evolution, portfolio process. Well, as been we nine And know, busy in as it's progressing approach a already have we Julie. we've doing been of don't consciously since chair result months the phased industrial to consciously It's a you CEO this a Chris, transitioning been as an and that part team. with have across cultural so this a

that plans lot communication. And operating team. led a execute able to been done been fashion highly we in sure our the back so programs these execution professional, with in globally. been this in around end We've doing business to to that in are industrial It's communicative, core that almost strategy up. leaders things. we've what And we're recruited understands either that's why making communication the a the up -- have in that of facility major very of as our with -- a a the every clarity I've we've to company

integrating the consolidating facilities company, we like overhead. around rationalizing oriented our initiative say and is in This

So macro. they're each what piece objectives obviously in clear that very are. end And the fits

I sure is clarity important find the that to and communication and is coming that candor culture make So along. very

leadership other the it you is It's is, performance. by And of not members of too and an driven say team journey. done I as my really leadership lot well would but never can easy career I've Julie. communicate team the including in us consistency as a much,

it was lot last area. have this started we much of after Board momentum momentum. Today, in when a this with harder gain think just I we year getting Julie; to on

completing. We products have

across overhead And lot with which It's entire and be Phase X, really is in that momentum, that set X to momentum the including up X it's and easier undertake to larger is much company, scope. a then possible. has the Phase Aerospace, that of structures. Industrial, Phase the So really

in this and make the Last is I'll with coordination comment full of is Board Directors. synchronization

We have programs. these very tight of management and governance

the there's line are a running. items of how that over been I'm nicely to a individual totality line integrated the with it. I'm XX And pleased items quite with company. quite that quite think in and culture more I pleased initiatives thus process already. we're we're has evolving with along we've And only in, I'm gotten nine months professional doing far far, how then

Operator

We our next will Truist. from take question Ciarmoli with Michael

Your line is open.

Michael Ciarmoli

year guys. morning, start questions. good Nice here. to for the the Thanks Hey, to taking

Thomas Hook

Mike. Good morning,

Michael Ciarmoli

Tom, into lot that this lot facilities is of of I run get your to guess requalification to something control. done specifically? movement, I and And a results feel it's there wanted XXXX. in there. risk comfort variables. the outside like level handle need on Phase if of see those And of sort to margin confidence don't there. negative look we've maybe outlook with a on products in expansion, half maybe just rates, just forecast I some always at risk? Industrial maybe I specifically over second just some that, we've I in the guess deck disruption I the some going consolidation. But been in here, new embedded risk different if for just Wanted there on to geographies, been you outline the anything the timing a you're the get before Is to you the of XX. mean, of this the level, there's variables Aerospace, back bad moving I any X, got

Thomas Hook

Yes.

I moving think a confidence high. Workload Mike. is level lot There's is is high. parallel, in

already and of Phase operations the One Industrial we've for facility same Phase done production that clarification or X, in products. Barnes consolidations and and X, similar on Aerospace, we're facility Phase to and X our both facilities facilities also the from moving existing consolidations, make most in

especially can into you're when has So and doesn't much greenfield advantages, that it a where but with location, move it from production requalified your a of de to to central all facility more one. an of Those site has advantages, like novo your kind qualifications product the day if complex. existing you're isn't for you it cost customers, volume, labor are a a moving everything to -- consolidating it facility if be moves requires moving

out is, you sometimes fairly point as Mike timeline And they're unpredictive.

the approach logical aggregate It's it's that into this volumes through the And very project. create So part more no rooftop. we're facilities, that taking through is central Aerospace volume as through Industrial leverage taking of having place takes our moves. by larger to place the move

those approach -- this by trying trying and can do get And to my focus novo really done down of to de lot not using is, in do the execution having is and approach manage with projects in in has we geopolitics, not career, pressures, to way by around there's product this And can ability line and and high the interest have imagine inflationary we two every potentially customer. areas, those. dynamics, core and know a effects job business mitigate the we're manage actively taking you been successful of the very recession, all integrate, a initiatives limiting our consolidate, to that business global rationalize, a rates,

set driving from success one idea both We're pressures. of on behind and execution part the focusing business the done. get But of to on team not we initiatives another global immune core

to these two year degree be confidence we results when that two and but looming manage potential in negative areas heavily a them favor, in industry able those on it So have our those working effects, all of against we'll all effects, given that investing cautious we some do of mix the some deliver like the we're and to deliver got out average actively. we recovery, to Aerospace, we've

into aggressively become to product-wise. more penetrate, geographically a afford leading initiatives, or so we're because trying company, and efficient in here extremely into to need effective the we know either obviously, can And we're investments we markets we more

in this is similar projects larger we've Phase plan, high degree think my -- difficulty So because us I in and against. while X just competence deliver is scope to X X is Phase type Phase already doing the been and to level successfully for

Michael Ciarmoli

it. I it. ahead the to the there's of but to income? at not operating how of of $XX look I going guys put I clearly, can are these thinking we operating out And run what be are rate costs I much XXXX? if we million, mean, Got labor, XX% helpful. is XX.X%, of this take savings a past guess to go we whether savings total mean, -- Got you I that thinking that rate you, if about with it's mean at That's should get to once to are actually -- run margin, going you drop card XX% kind inflationary sustained, kind corporate be thinking XX.X% but horse I have to the back here, pre-COVID

Thomas Hook

of to that the Even everything for the though Mike, the return integration interest to my I've rates and terms leading has with in pre-COVID. objective first and and are macro all Very and FX against is levels corpus get a business, forward is profitability with said I different post-COVID, consolidation our the as rationalize even question. the changed. and expectation thanks question, is revenue pre-COVID of and looking. executing our that initiatives, -- dynamics core very and economy -- though with global to going this and very addressed say Barnes the would when But it's we've I've world as before where

serve we've and company Our markets get to is are performance able efficient to historically above the with at to where effective of or more that been. levels the job be

journey. a So it's

a to the progress, with hard but is and not timeframe to is to press which to profitability -- a levels. into December me, made only lot of excuse XXXX very said reconfirmed barely work pointed Investor lot up directionally, Board higher is the on you although deliver; our team. press working what communicated to continue we hard to months do. strategies and return I mid-teens and Day the XXXX -- we being have our I've We've the where really for been continue margin, these plans back of of out to But the XXXX those of very get in got for nine streams objective invested we've in timeframe back and revenue as Julie our are to

Operator

Research. And from we'll Walton question with take Myles our next Wolfe

open. is line Your

Greg Dahlberg

Hi, for on is quick Greg the good question Myles. morning, OEM on One outlook. This Dahlberg everyone.

So can it this kind I looks kicked pieces production there? and through previously. confidence general, is or OEM that mid-teens up the you low-double-digits in talk chains from of more like quarter supply in to guess

Thomas Hook

pressure output right is is Certainly now are is drive back supply lot a the very of OEM -- it's we again. up chain within -- yes, driven as ramping there

across information I a think industry that's already companies. documented lot of at other well publication disclosed that's and

backlogs we're We have a working lot off. of that

and we've productive staffing efficient output perspective. get our comments, our teams up from an from and been know, you As trying more them to

out can the are to So constraints to get I now. requirements. would we certainly right trying more against do sensitive very is the castings say on and chain we're have door we are what materials best supply customer typically, to We're

of still on I fair the side. amount there's OEM So think a recovery

in we're match the the has the a with different more side outputs where to And aftermarket a aftermarket up also our and in to flying on side we're recovered aftermarket on pace. similar occurring, obviously trying way situation get

and guidance So with body to to would up to to pushing continue continues to we're on pull as to is as it'll just strengthen, maintain speeding the keep pace. that hard single have XXXX run I industry kind is obviously take volume down. behind And And industry wide air think this just in on to just are us -- going the to providing overall recovery, by to for driven it of recovering. and say general of I that we're try we most teams I the and we're catch-up is trying catch-up of

So do et a of operational lot of set get circumstances, raw the materials, onboard and plans castings, supply it's but to we favorable able have to people chain be our keep challenges to and a pace. of cetera,

be balance to over course going do I a think the there's of delicate So XXXX.

Greg Dahlberg

it. just quick leverage. And Got one That's helpful. one Thanks. then on

Or at longer-term? into kind guys Day that from just guess. change more Flowing right the around business that the So you in target about was as plans, quarter. The restructuring is the think the execution, efficiency think the X.Xx to sitting of through? does I Yes. core flow XXXX are X.Xx target I efficiencies that Investor

Thomas Hook

about Julie take that? How

Julie Streich

Hey, Yes. Greg.

what strategically options, mentioned, available. expense. we're to for have nice current target acquisition environment, a rate range something is the We Tom minimize in think range what's really see were want I X.Xx us. as if though assessing we leverage that It happening So on cash through working depends interest interest we're to change. go to may Honestly,

it a in would our around leverage at pay the a view things, been So little debt of looking cash channeling that down really like point a we'd long on point a to in ratio change in But near-term. there's -- X.Xx. of where maybe terms down to range keep not take

Operator

[Operator Instructions].

And a question with Truist. take Ciarmoli follow-up from Michael we'll

is open. line Your

Michael Ciarmoli

Hey thanks for the guys. taking follow-up

you're upside the this the it's of kind or what that auto Is on to Tom, getting should really changes market. business runner it down. production health we turn What hot guess what's Just gauge it weakness I of the or looking and into kind the -- be I is everything at model there? into mean, view as really business? of

Thomas Hook

it's different zone. by It's great question, a Mike. Yes,

product really line up side, line areas, to they've feet be the by America; for to of in We cost drive investments in a our be bring cost last in to feet our margin year made for hot accounts you as But manufacturing Phase side, product profitability. lower think competition. into cost to to in. Europe. on more automotive business, us have we've hot think that That's at and nice the in able feel I runners' it's are in better runner high that a capability I I side. significant we've address to be having the penetration in we've Europe. and competitive of get America have front But pressure better penetrating Europe aggressively. In on the getting actions the able already we X commercial investments environments customers done automotive Synventive street Part the business on lot some we do of invested think the on margins competitive been know, market, our this getting North us in on successful North street European got basis on more operations quite this

would Asia, one product thing the be lines. last China. story The more is of There

As hot our you know, OEMs in China in manufacturing towards lines, particular, product to a in automotive we've which oriented product premium runner historically very been westernized China. line selling very

vehicle are is HEV of EV growing literally that product don't China-based, hundreds As shifting and that's We into not to historically have type and a market line that we've and matched channel. customers into that sold channel. that a

-- commercial And it commercial towards product operations and with to line we've in the especially order, So in just away occur the manufacturers. multi-national we're re-energized automotive the a that the a [ph] team reconstituting a had kind large to We're shift reoriented BYD from has that I distinct the to before molding, this coming my the it in experience, manufacturers large is reorienting team. and automotive like product a area, what line Cherry between China company of OEM multi-national due there. from industry domestic Barnes automotive and and that so

should is has be expectations overall we Mike. have runners, incorrect it solutions hot area because us, automotive growth been And for a not by in zone. The

very answer thing different these So I it Europe, in we've the markets. good And granular the and and in putting now place realities solutions you, China of but done we're about those sets drive good a and to for getting growth. of solution are a is, on job by it America, it's diagnosing based --

Operator

call closing And to I remarks. questions time, at now this Bill further Pitts turn with the no for will back

Bill Pitts

you for earnings next morning we today's will quarter for second July our forward Abby. to now you, look XXXX conference and conclude thank to Operator, We'd this Thank in like call. you us call. all joining speaking with

Operator

you. conference ladies you thank call Thank gentlemen, participation. we for and this your and today's And concludes

disconnect. You may now

Barnes (B) 27 Apr 232023 Q1 Earnings call transcript