Q3 2019 Earnings Call
Expands our spend sensing product portfolio.
And builds on our strategy to focus on innovative products that sense connect and move.
We expect that these high performance products will expand our industrial and medical market sales and strengthen our quality of earnings.
While most of Qt sales are in the Americas once fully integrated we expect to grow sales in Europe , and Asia through our existing footprint and the sales team.
We also look to improve the product capability by leveraging our expertise in ceramics.
As we build out the temperature platform. We also see advance next generation product development opportunities for transportation customers.
We do expect the acquisition to be accretive in 2020.
We continue to work our M&A pipeline, our objectives, our growth objectives have not changed with 5% to organic growth and.
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Thank you Juan it's been a little bit more stable.
I'm hearing that the classic truck.
Downturns typically.
Thank you.
On average per year, and a half is that kind of expectation you're thinking or you think you have market share penetration the kind of well such that kind of the downturn.
We are.
John we definitely will have softness that we're managing through into first half of next year as we said in the prepared remarks.
Yes.
The other side of it we've also said, adding a second customer in the second half of next year.
Yeah.
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Wondering a little bit about.
Good.
I'm, probably keryxs for hearing you talked about the three to four cents EPS improvement, 12% on annualized basis.
We revisit those remarks and clarify what you're talking about them.
Start off now that the shed some color here as well so in the in the fourth quarter, we said, we'd be taking actions improved margins and operation expenses.
Through improved by three to four and and sense of Vps and next year at a similar sales run rate that would be 8% eight cents.
12 cents. So as we said earlier, we're prioritizing our variable costs and addressing it for the volume has changed we're prioritizing a fixed costs and our headcount where we see the most opportunities to give you some color around that Ashish, yes, John the the run rate that you're thinking of some.
Contained in the longer term somebody will be shorter term in nature, So thats where the.
Yeah.
Three to four doesn't translate exactly on an annual basis.
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But we continue monitoring the market conditions and just.
Cost base.
To to reflect.
The environment that we're operating in.
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Okay, So just where I understand but these are new attractions and.
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Sure.
That is correct John .
Adjusting.
Operating expenses as well as Kevin mentioned.
Hey, Bill and fixed costs on the production side.
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Got it.
So that helps a lot of change.
On.
The second ceramics.
Boundary.
Okay.
Mhm.
Just curious what the.
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I mean is to getting that fully operational operations obscure.
Correct.
People.
No.
That we would and John we made progress in the last quarter.
Continued to make progress into the and fourth quarter and I think we'll see things normalize in the first half of next year.
Uh huh.
Got it.
I guess, one last question on that.
Yes.
On that 55 million reduction.
Backlog I thought the backlog extended beyond two years carrying some kind of.
Im trying to reconcile the 1.6 billion and 55 million reduction.
And how that with what's the timeline of that expectation of revenue reduction.
Kind of walk me through how should be thinking about that.
Yes. Good question, John because we do not see any significant impact beyond 2020 in the backlog.
And we look at it some contracts that we have our two years. So if we're seeing softness this year. We're adapted for next year as part of that 55 million and at the same with go with some of that is in ceramic some of those in transportation.
So we've got a very clear picture and how we adjust to that.
Got it alright, thanks, guys I'll get back into queue.
No.
Okay, John Thank you.
Hi.
As a reminder, that a star one to ask a question.
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What you walk us through again on how things.
Thanks deteriorate in particular, Italy unit.
Q3, and would you clarify how long these weaknesses with less when we see like if the markets.
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I think you mentioned that the weakness is may last true 2020 .
So can you talk more colors, all different mark because I think that will be helpful.
Yes, the main deterioration hendi was in the actually had a product line commercial vehicle. It was high single digits, we expect us to continue through the first half of next year and beyond that we don't have the kind of a key line of sight at this stage.
Hi.
So that's where it was.
And then on the other side of things.
Hi.
And we've got a good acquisition here that we've got nice growth potential as we expand as outside of North America into Europe , and Asia and on the.
Ceramic side of things.
Yes.
We've had one or two customers that have had a tough to you heard because of terrorists and we think they're going to start to pick up as move into the second quarter next year, we should see improvements there.
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Distribution.
Assumed that inventory burn.
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Any indication how much longer inventory, but.
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So can you share and others.
Yes, just for the distribution side of it.
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Team and a gradual decline in inventories.
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It usually takes somewhere from the peak of inventory.
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The four quarters, we think thats going to be somewhere.
Me.
Our second quarter next year, what we get back to normal.
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Thank you.
And then for Q.
Is it reasonable to assume that because of the three pension.
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May be somewhat the.
You heard me because.
And we haven't seen any significant trade the implications there it's a very solid business very good quality of earnings and.
And we look at it as a platform where we can build out.
Hi, there.
Expanded our existing sales teams and product teams in Europe and Asia.
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And expand into other end markets as well.
Really like the.
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LNG, we can leverage our ceramics capability due to improved the performance as well.
Dave.
And then it's a platform we will continue double.
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Three new customers that that business has added in the.
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And continuing to do a good job in terms of.
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We're.
And we'll be looking to leverage that as we.
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There are no further questions at this time.
I'd like to turn the conference back to mR.L. Sullivan for any additional.
Cling.
And.
Thank you all for your participation on today's call. So we've had a tough quarter.
Maybe.
It's time to get back to work here and make the progress we need to make that we outlined in our call and we look forward to updating you in the first quarter of next year. Thank you.
And.
Oh.
And that does conclude today's conference.
Thank you for your participation you may now disconnect.
Andy Rooney.
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