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spk_0: ratings and welcome to a b c technologies fourth quarter and fiscal two thousand and twenty two earnings conference call as a reminder all participants are and listen only mode and the conference is being recorded after the presentation they'll be an opportunity to ask questions to join the questions you you may press star than one on your cell phone keypad should you need assistance during the conference calls you may signal operator by pressing star and zero i would know like to to the conference over to your host nathan barton vice president invest the relations thank you sir you may begin
spk_1: thank you and think everyone for johnny upset with me on the call or a disease newly appointed president and chief executive officer terry campbell and david smith chief financial officer of a b c technologies it's called the webcast live on a b c technology investor relations website the webcast and the competing slide will be the a reply for twelve months following this call the content updates call his property that you see technologies it cannot be reproduced transcribe without prior written percent from the company before it began are like remind you that to they call will include or looking statements within the meaning of applicable securities laws which are subject to various risks and uncertainties that could cause actual results to differ materially from these statements any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in are piling with the canadian security is regular tory authorities on cheetah weaver the as a disclaimer on flight to of the earnings presentation for additional information with the no obligation to update and use his on and statements or information unless required by law i want to remind reminder investors that we are on a fiscal year the began july first twenty twenty one all references to coupon this or twenty twenty two or to our fiscal quarter ended june thirtieth twenty twenty two and you for fiscal twenty twenty one or two or fiscal quarter ended june thirtieth twenty twenty one references to fiscal twenty twenty two are to the twelve months ending june thirtieth twenty twenty two and fiscal twenty and one or two the twelve months ending june thirtieth twenty twenty one else or note the while a b c shares trading canadian dollars the company reports it's mansholt in us dollars with that omitted slide for as we announced on august sixteen the board of directors has a planetary campbell identities new president and chief executive officer taking over the position from thought shut them the transition has been in the works and fairy joined a b c earlier this year bringing with them a strong track record of operate no leadership from his time with other major tier one suppliers including magda johnson controls and most recently the woodbridge group where he was chief operating officer overseeing one in ten thousand employees and sixty locations across fourteen countries the board of directors along with erupted a bp look sporting terry as the public continues to grow it's leader shit in the automotive plastics and white wedding space with that of let's turn to call over to her newly appointed president and chief executive officer terry campbell
spk_2: beckett a good morning everyone a very excited to be taken off the position of president's chief executive officer here at a b and why take this opportunity to thank the board for compensation and me of a discrete organization as i look forward i'm excited about the opportunities that a b c as a head from new business windsor park portfolio talents as the automotive industry transitions to electric vehicles to the integration of irish and acquisitions and the right runway ahead of us for future emanate and most importantly working with all the great people that make a b c a leader in the lightweight and space i hope that my twenty five years of experience meeting other tier one suppliers and operations manufacturing launched and strategy for bring a new perspectives the organization help us continue to build on a b c suggesting strengths while diving the company insists next phase growth as an innovator supplier of automotive plastics but that said i will now turn to our results for the quarter and a year on slight sex they will provide additional data on financials and his remarks but the summarize our we saw a passing trends this quarter topline strike continue to be offset by industry wide cost inflation pressures and operational challenges at a few of our plants brought on by the production volatility of our oil customers these pressures could not be adequately offset by cost controls and operating efficiency improvements resulting in margins that still significantly miss both are turn up targets and those that we have previously communicated with the investment community the contribution from my scores acquisitions of the elite force and car at elevator consolidated gross margin but not enough to offset the continued profitability pressures and core a c operations however given the challenging macro environment we still find ourselves in the senior leadership of a b c and i are sworn several measures controls and actions to bolster future performance streamline operations and as costs and finally you have seen in our zito filings and preservation the sporting a b c answered and to an agreement to acquire continentals watch her systems pipeline for approximately twenty point five million euros just by the end of the quarter this acquisition will add to our growing wash her sisters portfolio expand our ability to serve our customers globally moving to the fiscal year two thousand and twenty two highlights on slight seven or for your revenue remain puppy flat at about nine hundred seventy two million i guess revenue of nine hundred seventy one million last year adjusted ebitda was forty five point seven million for the year and adjusted free cash flow came in at a negative forty six point two million largely due to working capital cash usage as production buyers fell off a cliff and fiscal que one during the worst at a semiconductor crisis and the resulting oil production shutdowns as anyone cover the our universe is aware of the supply chain issues that began to impact the industry and our fiscal que three twenty twenty one continued through the entirety of our fiscal twenty twenty two to very impacting our financial results semiconductor shortages robert your price increases labor shortages as well as wage inflation a utility cost inflation out your results that fell well short of our expectations we have seen resin steel and other components remain elevated at historically high levels and fact management estimates the impacts of these various mackerel factors was two hundred and forty million of revenue and over a hundred fifty million of even when you click stranded labor costs components and non nonresident raw material the significantly higher negative flow through on profitability was driven by the elevator cause i just discussed that have no associated revenue at them however against this backdrop a b c made several strategic strides by closing on to acquisitions citing a third and signing a large sell these back which will bring in a me fifty million of capital that we will use to pay down debt taken together these moves will continue to strengthen a disease long term for pedophile session providing additional scaled runway for growth additional runway from the acquisitions compliments success and our top line see to a business wins which exceeded target for second year in a row with two point two billion in life a program revenue ab see also benefit from the largest year ever of electrical vehicle with with a four hundred and thirty five million and lifetime revenue as we have spoken about extensively each quarter the industry witness significant operational challenges during the fiscal year that we're both unpredictable as well out of a disease control what we can say is that following the dismal industry wide performance during our fiscal first quarter production stabilization did improve with our financial results following suit to some degree of the at at levels well below where we expect to operate under normal conditions as we have your calendar twenty twenty three were hopeful that production begins to look something closer to normal while we expect continued impact from supply chain issues as a fiscal twenty twenty three were hopeful that the oil production levels will continue to improve as result of the expectation that cost pressures will continue a b c is taken actions to mitigate the impact on our results and improve marches in the near term as while strengthen normalize operating margin of the businesses a teacher or production returned to a more normal cadence moving on a slay for a review of the broader auto market related to production and atari on the lucky to see the total us inventory has remained depressed go on a slight improvement since october twenty twenty one with roughly one point two million vehicles on the other lots average inventory of twenty four days is roughly sixty five percent lower than dealers had a starkly kept on have eco that now shifting our focus to the production environment so i just has reduced the production forecasts through two to twenty twenty seven or more normalize production environment is still expected to resume and calendar year twenty twenty three as macro economic challenges a date with him a built potentially beginning and late calendar twenty twenty three hs is projecting that will see an average of four point one million vehicles produced each quarter pounder twenty twenty three to twenty twenty nine or later the past him a toy levels combined with a strong consumer at an age in north america vehicle fleet in the cable past long term demand for both the industry and a b c going forward however remains to be seen on the supply side will bounce back to meet the demand or would summon productive shortages and inflated input costs my be but the added uncertainty of economic slowdown ab she continues to push operational prudence investigate strategies are said ongoing challenges but he just like nine or you'll see some other important launches a product lives during fiscal twenty twenty two and year we launched a number of products on the new for brothel allowed to important halo he the platform launches with gm via the new car likelier as well as a g m c hammer through these launches a b c continue to demonstrate the positive makeshift in the top line performance airline with some key trends in the auto industry specifically the shift towards light trucks and electric vehicles ab see also launched exterior system products on the honda civic or consistently top selling vehicle in north america which enables us to continue broadening our customer base with key asian only and customers with which we expect to see additional growth over the next several years so industry why production has been temporarily affected given a challenging macro economic environment oh yeah new business coding activity signals expectations for robust future production for example or new business wins we had one point two billion lifetime revenue when a us based only on track along with a large lifetime battery electric vehicle when with a luxury oh yeah in addition to these two notable platform wins a b c is also exceeded new business when target for a second year to roll we were awarded eighty four distinct program wins across fifteen different oh yes for approximately two point two billion dollars of lifetime program revenue important for the future growth of the company thirty three of these programs were easy wins on nineteen different vehicles representing approximately twenty five percent of total warded annual and roughly twenty percent of like program revenue we can you expect the agency will walk further meaningful easy wins in the upcoming fiscal year
spk_3: with that i will turn the call her to david
spk_1: like theory of there was an overview of our financial performance in our fiscal fourth quarter and the june thirtieth alibi brief summary of our for years to school twenty twenty two financial performance the church fight eleven so revenue adjusted ebitda and adjusted free cash flow over the course of action school year but i'm also give additional pollard to be another major the lines the first of the graph on the top left maybe he's revenue for queue for fiscal twenty twenty two is june of nineteen point two million this is up from two hundred thirty three point two million in two fortress two twenty twenty one which was a thirty six point nine percent increase the just over half of that growth attributable to the recent acquisition of jewish balls and
spk_4: colorful
spk_1: as a result of a beefy favorable product mix in the quarter the legacy businesses top line growth of fourteen point five percent outpaced industry production in north america which increased by only eleven point seven percent queue for fiscal twenty twenty one to queue for fiscal twenty twenty two on a full your bases reported revenue remained roughly flat year over year increase from nine hundred and seventy point nine million in fiscal year twenty twenty one two nine and seventy one point nine million excluding acquisition contribution eighty six a significant decrease in revenue compared to fiscal year twenty twenty one get a loss production as a result of opium plant closures driven primarily by semiconductor shortages last year in contrast production approach near normal levels after initial covered in lockdown or march to may twenty twenty it is worth noting though that he refused topline excluding up to the she still perform better the north american industry production by one point nine percent a year and finally before i move on from the top line i'd like to point out the positron he seems revenue increasing progressively through the year while the first three quarters are declining trend in terms of impact from external factors management notes about the nature of these challenges and the real impact in fiscal two for what an inflationary pressures continue to negatively impact costa sales resulting and gross margin contraction due in large part to increase raw material costs an early resin glass rubber paint and feel a lot higher labor and free costs as a result of the sales increased ninety point eight million two hundred point seven million into for fiscal twenty twenty one compared to two hundred and ninety one point five million thank you for fiscal twenty twenty two though it should be noted that roughly half of this increase is attributable to recent acquisition moving on to us a total as shooting increased from thirty six point three million to for fiscal twenty twenty one to forty four point one million you for fiscal twenty twenty two if he reported and that lot of thirteen point six million to four compared to a net loss of eleven point seven million to for the prior year the net loss for sharing you for fiscal twenty twenty two was twelve cents versus a net loss per share of twenty two cents in the same quarter last year old figures around a basic inflatable basis
spk_5: moving out a to grassy see in the right hand side of the flag
spk_1: i just leave radar for the queue for fiscal twenty twenty to decrease the fifteen point two million from twenty six point nine million into for the prior year he just leave a margin for the quarter was four point three percent compared to ten point one percent last year hire you ever your sales rafa by inflationary input costs resulting in the cbd margin compression with to discuss with you earlier look into the final bar in the graph in the bottom right of the size of food a beefy close your the just the the death for this fiscal year two thousand twenty two at forty five point seven million this is compared to one hundred and thirty three point four million fiscal two thousand twenty one a decrease of eighty seven point seven million this depressed fill your he did ah performance of largely driven by inflationary cost pressures and production challenges that agency face it has gook you want you to and then again to scoop you for destruction chances you brought on by broader macro economic issues affecting industry and particular semiconductor shortages the cars are we on customers to frequently started stop production resulting in significant stratocaster a b c compute you onwards the benefits a full recovery million production vines roster by inflationary pressures as was operating issues be a face that thought about plants materially to earlier i will note that in this regard baby see like our other tier one competitors instructions with the aliens by recovering some or all of inflation costs incurred this recoveries and ten offset some the negative your of your financial results in businesses faced the sister year
spk_6: these conversations are ongoing
spk_1: as i give it's revenue i point to the graph on the bottom right to choose acumen of adjusted the read performance the highlights the despite the difficult first quarter the school year this deposit to even performance and subsequent quarters is offering see some relief albeit not enough to offset the impact of inflationary cost pressures that we are encouraged with adjusted free cash flow for the quarter improving significantly the six hundred thousand from adjusted free cash usage of seventy point one million thank you for fiscal twenty twenty one this quarter marked a key trends reversal after three consecutive quarters of lower your you're just a free cash flow as you'll see in the final bar graph on the bottom left just free castles negative forty six point two million for the fiscal year this is compared to just a free cash flow of seventy nine point three million for fiscal twenty twenty one the situation is largely a carry over from que en cast usage at sixty million as a keep production cuts and a large impact are working capital the answers and effect which is unwound to some degree over the course it's just twenty twenty two but the we expect to continue into physical twenty twenty three as production continue to become more normalized early and customers as we are many of our peers and customers have repeatedly reference of the last three years i've visited used to be adversely impacted by a number of on market dynamics including reduce production voluntarily and customers do some i cannot protect shortages inflationary pressures for cost including labour free utilities rosin glass rubber paint and feel i can really demanding balances and really it's supply chain disruption as as he from the grass on the top left of the slide exceeded semiconductor shortage and other away production issues mansion estimates revenue would have been about thirty million dollars higher a dream forty nine million the quarter look into the grass on the top right now measure progress nato just leave it i would have been about fifty million higher or thirty one million into forced us to twenty twenty two were it not for the negative impact of cost inflation issues and production costs primarily raided the semiconductor shortage and other only and production issues and finally on the family problems again that are reported revenue does not exceed jp revenue but that adjusted he be done to their fifty percent proportion share of rgb viva likewise the computation the just leave it in margin only includes city present the jeebies revenue and that manager because the gp including incomes damon the agreement the basis you need to refer to her and dna see the jp proportion sales and adjusted ebitda details aren't in his father feet are is also available on orange best your website by twelve shows the walk from cash from operations down to adjusted free cash flow from year for queue for cash from operations don't fly from last quarter due to lower a bit our results while other aspects of tesla remained relatively steady for all four corners of the year as mentioned earlier in the call you can see the significant improvements to be any of year in cash for against the backdrop of a recovering customer volumes and normalization working capital
spk_5: on fighter genie see details that our capital structure liquidity are totally total authority position was wondered and seventy three million as at the end of year which is remained strong throughout the volatility of this fiscal year this level of quality provides ongoing flexibility for operation
spk_1: as mentioned on or two three call me increase the size of our credit facility that five hundred fifty million a sudden his maturity by two years the february twenty twenty seven on our facilities except the fifty million revolving facility be any proof pricing we remain fully comply with all components on the the another credit agreement and as we previously mentioned we maintain a high drawn a revolver do the lower levels ministry production resulting in a temporary unexpected increasing luggage management expects the levers multiple the decline as to benefit from improve market dynamics and operation performance the integration of our recent acquisitions and the proceeds of the sale the carla for real estate we accept these factors will allow us to pay down debt and return leverage levels below mansions tartikoff three times with adults are the back over terry for a few closing remarks terry
spk_2: thanks david so to sum things up what we've seen this year is conflicting dynamics playing out between the top line and the rest of the piano on the one hand we're continuing to see improvement in some areas of production and topline growth helped by a recent acquisitions and demonstrated by our business went through the year while the overall dynamic of less frequent and fewer short notice production costs from our oil i'm customers in north america still proving in europe where we have smaller but still meaningful revenue representation we're seeing things i'd say weaker as input costs have remain more elevated on the other hand as we the further down the piano you can start to see some of the operational macro economic challenges reflected through are compressed margins we are acutely aware of the pivotal role that a b c core operations plays and enabling top line strength to flow through the piano as we alluded to earlier comments we are aware of the challenges and our business and we're implementing a variety of measures controls and actions that aims improve operations but that will require associated a necessary one time expenses to que one and que to fiscal twenty twenty three his actions in the near term or port part of our medium and long term plan the over a long term architecture at least for the auto market remains strong as we've seen only and customers continue to commit large dollars to future programs and consumers are buying every car that gets the dealer lives we expect this trend will continue to positively impact their financial results in fiscal twenty twenty three as production normalizes further we sign another acquisition this quarter a continental washer systems building on a strategic moves we made earlier with the acquisition of the alleys balls and carletto and we're continue to look at further acquisition opportunities that will strengthen our businesses future and are expecting emanate remain a focus for our team as i said of my opening remarks i'm excited for everything ahead of us and we got the right team place to execute on the opportunity to grow a b c strengthen our operations and a chief financial results that exceed those of years past that concludes i prepared remarks thank you everyone for listening and for your support david and i are now happy to take questions
spk_0: thank you you will now begin the question and answer session to during the questions you you may press star than one on your telephone keypad you will hear a tone acknowledging your request if you are using the speaker phone please pick up your handset for pressing any cheese to withdraw your question please press start been to you will pass for a moment of college during the que our first question comes from mark noble at scotiabank please go ahead
spk_7: they were years resolutions do it i'm been say my my first question because mr understand the a quarter over quarter decline to probably don't even look at nine eleven
spk_1: george instructors were comparable quarter over quarter forget the trying to get a better sense of what happens is good keep overseas fiscal que three
spk_7: given super
spk_1: so so hey mark i think i'm i think what we still see as we still see an intensifying impact from from what those exotic chapters are in terms of and from the impact on the business and and the and so i can give you still see the relative to to every virtually every and in some the impact on the business relative to inefficiencies cause still by freight and in delays in terms of supply and i'm in any could be there done that really is are the odds is satisfactory that it could be impact of a little bit higher i you know the one or thing to that that certainly in there the we didn't list of the largest factor more because it's related to the the accounting for acquisition is there's about five and half or six million dollars that went to the cost of it sold as a result is the fair value adjustments that are pretty normal with the with acquisition accounting i'm so he did also have that impact that would die would add as a sudden have to six million to add to what was the most bars get you speak to get to the the performs of you the girls or deal he told me cool yeah i think that dumb i think that what we're seeing with their the gilead old acquisition again we'd we'd known them for years before and i think that damn their did been impacted to a certain extent by some of the sales reductions on but i think what we're seeing as we're seeing dumb operating much in line with with what weeks back it's apart from you'd like to sales are having some some impact from higher material costs i think the the impact probably for college so is different in that that they are more impacted by the conflict in ukraine and so so as all our suppliers really that we're seeing in europe the being significantly impacted by energy costs arm as well as i plotting cause i think what we've seen from from the customers there have been higher self so i think long term we certainly believe all the businesses are really strong and gonna deliver what we expected i think there are some short term factors that damn that that are expect that million packed it our argue for but we did we think they're temporary and i should be as some other things particularly the energy crisis in europe get solved right in and do the queue factors at all out of production costs energy without that have been to the just for as a for the exact exalted this are caught i'm it i generally think it it wasn't adjusted for it it could be caption examined factors again kind of theirs and mailing down all of that i can guess is there's a that of are in there as well as science but i think i think that certainly some the inefficiencies and some of the asthma things as release energy costs family are not fully contemplated in the in an exemption factors that we got listed them i think the other thing to did you see
spk_8: they still are the are a lot of efficiency in terms imagine were part our for such that has these other straining toss that done that still hasn't learned businesses operating the efficiently as they should
spk_7: gotta do this one las personas and
spk_1: mention some have expenses for start or maybe this whether bother sorry market in terms of one time one time expenses in the first half of did you just there by the question please he has served with pick the the coming fiscal first half of it just go to some one on expenses related to the axes your good yeah i think i think that some i think certainly he expected to see transition that bedtime that that that we're looking at the way the organization is as than organ as set up and down and there are some things sure that we haven't fully fully completed yeah but i think that you'll see as a result of trying to make your his nation meaner more posts
spk_2: my focus more product focused on the that's the direction that sound that said that terry was mentioning that going in and maybe to you want to add a few points to that yeah i think you know that is a great question thank you for your your comments earlier mark i'm debbie to be kind of it on a look back at me that mean our customers changing so we have to change and with china line are operating strategy and are operating model to be market session and i'm especially with the way the market share
spk_8: quickly changing so we're trying to implement a model that we think's gonna allow us to change and pivot accordingly manager costs aggregated drive some efficiency so with a better efficiencies with dinner business enterprise white
spk_3: suddenly he had a rough estimate of what because release versa
spk_2: at this point we die says ongoing we're doing know enterprise why devaluation we're looking at
spk_9: all aspects of our business in terms of the aware we think there is opportunity to better line with the our product in customer focused and and create more efficient season and obviously trial or some costs and the business offset somebody pressures ever facing today
spk_3: i would outside the end of the quarter the next call the able to
spk_0: talk more about it
spk_10: thank you our next question comes from ryan brinkmann of jp morgan please go ahead hi thanks for taking my questions i'm your relative to the lower margin resulting from cost inflation how much would you say stems from commodities i read in the release you call that rather than glass reference ya person's how much would you say stems from other costs like you pulled out in the release frightened and labor and maybe just a couple of the questions around that including is it fair to say that your commodity pass through arrangements really primarily to read them do you have any pastor mechanisms for a glass rubber or steel and how would you say that those pass through mechanisms for negotiations are progressing to recover commodity costs and then separately or know suppliers today has pastors for
spk_1: break or labor which must be accomplished only through negotiations do you expect to be able to offset the costs also be a higher prices and over what timeframe or your higher non commodity supply chain past maybe need to be more upset the at your own productivity costs saves operating marriage etc as opposed the customer pricing ryan let me let me see if i can if i can unpack all of that yeah i do think they be see it is certainly a very critical supplier to our customers and so on so we've sat down and we're having discussions with them and and we are really talking about the for game and of the impact of these are these significant inflationary cost and our business so i'd say that we haven't we haven't limited and i think you know and and test discussions he said them we roughly half hedging mechanisms resident of about fifty percent and in what happened under increased costs and rather than our our male significant to that so it's it's that pardon is uncovered but there are some other other things that we buy but it is not did not it's not glass not paid under some the smaller tonic components where there's a a bit of a path to arrangements but but that's really not we're talking about we're seeing is it is the glass fiber to the goods the paper and as you suggested a lot of those things are on protected himself as i say we we're doing the fourth in discussion with the customers to look at the a full gamut and i would say in a we ban we've been at it for a while i think there's a bit of a process there's the back and forth as a sharing of information so that them so the customers can understand validate on the you know what the request are and i think that's one thing they be he had dunno a really good job with is being prepared to understand to have the customer understand where these costs are and how they impact the business because i do think larger this is a partnership and i think that damned in our understanding how how these cost of of saturday the us is very important to them so i think right now we're i think we're in the middle of it
spk_2: and and i think there's some there's probably still some time to go to to get through to the conclusion i know that we're we're kinda kind of the accelerate these two that died they don't they don't linger and that we can all move on with the business and altair you may you may have some impact the you want to put are discussed or you're thinking about that yeah no i think he captured it very well data any these desert desert long complex difficult discussions are having whether customer and yellow day transparent in terms of the the birds that were encouraging and career in our business and the charges were comparing our working with them closer and continue to work with them closely the or somebody somebody is facing pressures that we have based on young the the inflationary impact our the impact to arises and and at other costs and our business is just do not sustainable so a always easy discussions that we're we're we're we're gonna stay at the table and we're going out we're we're we're we're going to work harder at figure in a way forward that makes sense for both a b c and the customer but i i can't precise enough that the very complex difficult discussions parts of our business some of our our our our larger programs if we don't come up with solution then
spk_9: yeah they're just gonna it's gonna drive some difficult decisions that i think we're prepared to make those difficult decision because again some of these pressures that around or businesses that are hitting our pricing
spk_2: there are costs models are just not sustain was me move for itself i am encouraged with the customer they're listening they're working with us we have some
spk_10: we have some
spk_2: further discussions on the horizon with them were going to continue to to work hard to come up with a solution that obviously medicaid some of the the current state of our business
spk_10: okay thanks to just as a follow up to that when you say you're ready to make difficult decisions you know that that entails more like we don't want to we up his contract or more like we're not gonna ship parts as for that the existing contracts yeah we're not anyone ever growing going a ship parchment because supplier we are on when i when i could get in that discussion but i think we're going to have that you know i mean if we have programs that are underwater and they're not sustainable we're going to have to find alternative measures to to help the customer support those demands and a may not be a b c on that's not the our intent our chances to continue to grow as a customer but it's it's very difficult time right now and and yeah we're prepared to make the decisions that thicker and the best interest of of the shareholders in the company
spk_1: okay that's very helpful thank you and and while you continue to not guide i think given obviously the uncertain industry macro backdrop are there any guidepost or parameters that you might be able or willing to provide for how you are thinking about how a b c performance could track and fiscal twenty three should the industry or macro it out play out in a certain ways at so for example while there's a billion the future trends in production and commodity prices remain low if we were to assume that say production track the line with i just like occasions and that rather than other commodity prices remain flat vs two days later spot prices are how much you expect a b c t ah know oh pro forma revenue or a bit hard to track or in that scenario
spk_10: right i think they're the subject guidance for us is very important and and we understand how it is our for this to you and i think i think what we what we like it was me feel like the the ground as little bit more from we we would expect you want to come back with guides and we're hoping that and in a quarter very near and very near future your but i think the more we just don't feel like the ground is is secure enough yet to do anything that would be other than wildly speculative than in of things with respect of i'm as he gets begins getting clarified in so many things with respect to custom recovery as though good clarify that those a be some significant milestone where where then we'd be able to to go back to getting
spk_1: guidance but i think that's still at least a quarter away
spk_11: okay got it thanks and and then maybe to finally i feel like a teen you mention that in europe remains less predictable and and call out energy costs their i know a minority of suppliers such as app that you had recently called out downside risks to i just and consensus expectations for this region or what is your outlook for your
spk_10: which matters more few than than before or does it differ materially from i just
spk_0: am i think that dumb we we're looking at some at at the i just constantly but i think we feel like the customer eggs we have has a maybe a good strong correlation to to what we built into our plans and budgets until i think that dumb as far as discounting from i just i did something we always look
spk_12: yeah but i think that that we feel like there's a strong link there
spk_13: very helpful thank you
spk_12: our next question comes from peter's square of the ammo capital markets please go ahead i morning bottom line on it
spk_14: my gosh we're having morning
spk_12: gonna the commercial
spk_14: partial negotiations are having with your customers like bottom line when you think
spk_1: there could be resolution where we would know or he would notice an improvement in your financial results certainly sounds like it's not going to be one isn't something which he and subsequent quarters of the here is going to be like the negotiations i think i think that that as we think about a right these are these are critical relationships to odds and and i think it's gonna take the time it's gonna take we're we're certainly condom sack the we don't want them to linger and and we are we think it's an interest of all parties if we if we move through that
spk_15: expeditiously i n and i can tell you the conversation that happening in real time there's not significant delay on it could be it you want but given that we're sort of twenty days to go i think that this the the better players the think that maybe it's it's more of a to to impact for us but but i can tell you were the critical relationships i think
spk_14: you're sensitive we want to make sure that we are we deal with the facts information and be very respectful other way around so it's gonna take the one time it's gonna take my time but i think that as i say we're in the middle of it i've been a lot of information exchange a lot of discussions had and dumb and and again i i feel like given where we are it's probably more of a queue to advance and the q one
spk_1: and that nature of the any of it involved a retroactive adjustments or of we any price you're just going forward
spk_14: p peter we know that there's a lot of a lot of suppliers are having discussions and i think that some until you until you get to the point restart the have settlement discussion he could be anything so i think i'm a it's really hard to predict where the conversation will go but but i think that from we heard for our industry sources it could be the number of that solutions that could be rational but it could be that there's something else so i think that it's it anything that we discuss with your this point i would be quite speculative and i think i think we just say that you know we're going to have a professional and and respectful conversations with the customer and dumb and it could be part of it but but i think we need to wait and see kind of what they offer is and and how things worked out with us in terms of what we can accept okay
spk_12: terry question for you
spk_14: listen to your talk this morning
spk_12: you know the company is a thing difficult and complex issue some of them like maybe the volumes will recover made you'll get caught recover but a lot of these issues
spk_14: are not gonna go away the near term and they never go away
spk_12: at the same time as you can see the business is significantly underperforming from a financial point of view even well below your expectations
spk_2: i'm i'm just wondering what like met like based on your comments are you
spk_16: sandy three acquisitions the third one being announced today that the company's very focused
spk_2: on further acquisitions given the complexity of the underperformance of the business don't you think this would be a time to be focusing internally on your existing operation making the necessary changes so that you can be successful in the current operating environment that just surprised that you're so focused on emanated and a time when
spk_9: is that the so challenging so like to hear your comments on that you know on what i just talked about yeah not a great question so i i i i i wish i would emphasize more on the internal efforts as well so yes i'm in a very important as well as we sort of move forward but and parallel were in know undertaking as is significant
spk_2: an amount of
spk_3: exercise is to reassess or business reposition our business if you look at it historically i mean it's been a business that has been a family run business been growing organically it's been a leader in your north america but if you look today in terms of were trying to do you were trying to expand our customer base were trying to become a more global organization and
spk_9: yeah obviously the the emanates going to help us with that but of the are based on the current state of business and in the challenges that we're dealing with specially call that in the semiconductor an inflationary pressures just to name a few it's gonna a ah it's creating a different outlook we wouldn't have to make different choices on how we run our business moving forward and and was we saw
spk_2: or to manage and and your through these these different types of challenges it is gonna be something that is going to require the the right subject matter expertise in the right team does certain implemented and and dry bills improvement so the you go back in in my experience in the industry's been dealing with it's very similar situations and my previous life again i'm out of your jc i'm magna i dealt with quite a few underperforming situations and and ill and that turkey
spk_17: zucker a realignment of the of the business model so we aren't we are creating we are looking at implementing a new operating model that's going to be focused is going to be much leaner it's going to be a much better focus on other the customer and products
spk_12: strategies but not the same time it's it's hopefully going to treat the efficiencies that that we knew we know are necessary to sort of create that competitive advantage when it comes to you know ca structure so your with a unfortunately i apply to get into more detail in in the next and the next quarter because with were so we're talking real time may now at the right of actions that we're looking at and prepared to undertaken in in the next several weeks and months
spk_14: but i can tell you that were serious about the measures we know are necessary and amber prepared to ah
spk_12: in both them and terry you come from you know given your backdrop you come from very different types of auto auto parts manufacturing is there
spk_14: you know given your time now at a disease or anything
spk_12: you know specific about plastic injection molding and and your business that
spk_2: particularly challenging a relative to other kinds of auto parts manufacturing that the obvious when that comes to mind you don't have full protection on your read that you have about like about you know about half liter thing happy procurement it's protect your customer programs but is there a unique about plastic injection molding that makes it particularly challenging yeah yeah it and i think you know that even hired me coming here a b c was pivoting somewhat relative to be know being a formerly a more of a components of fire to have more system integrator cells you look at their product portfolio and i'll it's it's starting to yeah the strategic approach they're taking i want to continue with that strategic for approach because that's where the value i'd really comes in my experiences in the interior space and an end eritreans based on the others you know that the aliens or death a looking for suppliers that can can be more system integrators versus a component level self
spk_9: my portfolio strategy standpoint i want to continue to figure out ways to accelerate when a be seized and doing historically on and try to figure out ways to do they don't take beggars steps there and and that ties in durham in a strategy is wow what we want to make sure that you know we look at some of the technologies relative to process and and and products one
spk_2: make sure they're added to our our respective portfolio so i like what they're doing and want to continue to do and and and and enhance and and grow with those those strategies ah strategies in place today are and and i think it's a lines up to what the customers looking for
spk_9: roger to as as the supply base know their thing i'm trying to do here as well
spk_14: is your out of the operating model trying china set it up to where we become more of a customer friendly
spk_0: business model so it's easier to do business with as relative to applications engineering or quality or operational excellence so very significant focus right now on launch launch accents operation off excellence and and the customer experience and that's where i'm really point a lot of emphasis with that the leadership team in terms of the rolling out this new operating model and the operating mandala
spk_1: archie aligns with the operating models that you would see
spk_6: in the aliens so it's yeah that's what makes it easier to do business with makes it easier to do business with a b c going forward
spk_1: okay thank you for your comment thank you once again if you have a question please press star than one our next question comes from brian morrison and pt securities please go ahead a good morning think you are just a couple follow up it sounds like your your peers that's nearly success with respect to pass one or customer recovery
spk_8: inflation costs it sounds like you're a little bit more downbeat i understand it's it's quite complex the negotiations that they like of you cheat any success to date or you or the like a relative your peers and then the second part of the question and have his you've been quite successful very impressive when a new contracts in recent quarters i'm one
spk_1: during our there and that provisions within these contracts that account for that the heavens the your face right now and the also subject to inflationary pressures now i think that the one of the things that i might say we're a little bit late to start relative to lots to the discussions with customers i think we we really took pride in being a good supplier and offsetting the impact of the inflation the and down and know we we had some like discussion but i think that damned that we sort of decided that got a given that the severity of what's happening here that that the we needed to to ramp up our efforts i'd say a little bit late
spk_18: but but i think that in the discussions we've also looked at the business that we'd quoted in one there's some of it down so that has some automatic mechanisms that are already provided for but but is part of the discussions were having if anything hasn't hasn't doesn't have the protection built into it and is a future launch those are including the discussion
spk_0: okay and then as many my question to been answered when i guess i'll follow up with in terms of the acquisition peter me it a good point about the movie for with the see the current operations but maybe you could just provides metrics with respect to
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