Q1 2020 Earnings Call
Good morning, everyone and welcome to rising Global first quarter 2020 Conference call. My name is a left and I will be operator for today's call.
All participants will be any listen only mode until we reach the question answer session up the conference call.
This call is being recorded at the request surprising global.
No. One has any objections you may disconnect at this time I.
I would now like to introduce Mr., Jeff Tricuspid Lambert IR rising Global's Investor Relations for Mr. Treichel you May proceed.
Thank you operator, good morning, and welcome to Horizon, Globals first quarter 2020 conference call and webcast on the call today, Okay goal.
Rising global Chief Executive Officer, and dashed, Richard though rising global Chief Financial Officer.
Earlier this morning, I'll start first quarter 2020 results.
Releases are available on the news sites as well as the Investor Relations section of our website at Horizon Global Dot Com.
Turning to slide to todays presentation includes non-GAAP disclosures. These disclosures are reconciled to GAAP in the appendix usually quarterly press release some presentation.
Both of which are available in the Investor Relations section of our website at horizon Global Dot com.
Turning to slide three I'd like to remind you that statements in today's presentation will include our views about rising globals future performance, which constitute forward looking statements. These statements are subject to risks and uncertainties that could cause our actual results could differ materially from the forward looking statements. We've described these.
Yes, John I'm certain visa no risk factors and other disclosures on the company's most recent annual report on form 10-K quarterly reports on form 10-Q, and other filings with the Securities Exchange Commission.
With all that being said I'd like to turn the call overtook washing global Chief Executive Officer, Terry goal Gary.
Thank you, Jeff and welcome to arising Globals first quarter 2020 earnings call.
Thank you to each of you for attending this morning's call. It from our team to yours, we hope that you and your family's remains safe and healthy during this unprecedented time in history.
Time as flown by since our last call and it seems only yesterday that we were describing to you the company's status and the outlook for the first quarter.
During that call. We described the actions, which we had taken in the performance metrics results that we were recognizing.
We also provided an outlook for the first quarter that reflected these performance improvements.
Our momentum with strong relative to sales and performance we were confident.
The World has changed since then.
In early March the initial impact of the Cobot 19 virus outside of China began to be seen.
We adjusted in rapidly established new operational plans and safety and health protocols and procedures with our employees, while being as our focus.
By mid March the virus progressed to a full global pandemic level and once again, we took necessary steps to further flex their operations, which range from full shutdown level across most of our European operations and for a short time in our Mexico operations to reduced volume recycling and our other operations around the globe.
In spite of this and bolstered by our operational improvements. They described in our last call. We still performed well during the quarter and provided solid results. Both on an absolute basis, and then a period over period comparison.
The horizon team performed exceptionally during this period I couldn't be more proud to represent them and the results. They generated on this call today.
So let's look at some of these metrics turning to page five please.
As a company with continued to focus on our cash performance and improving our liquidity position.
We have worked hard to improve our performance internally across all cash related metrics and that's successfully executed on refinancing activities targeted and our timeline for Q1.
Relative to cash generation you will note the company generated positive cash from operations for the period of $5.7 million.
This reflects a 55.3 million dollar improvement over the same period in 2019.
A significant improvement in performance.
Working capital management details will be described by Dennis later in this presentation, but in summary, we posted solid period over period for improvements on day sales on hand and days inventory on hand, a five days and 11 days respectively.
These results were generated through enhanced organizational focus operational efficiency improvements and related systems.
Even with these results there remains significant opportunities for improvement going forward. Our team is relentlessly working on further solutions to achieve optimal performance across all order to cash related work stream.
During the quarter, we successfully addressed the maturity of our U.S. and Canada, AB l. through refinancing of it within seen a business credit again, Dennis will review the details of this later in the presentation, but the result increased both availability and flexibility for US. This was a great result for the company.
As a result of our strong operational cash generation and our new ABL facility, we improved our liquidity position to 50.8 million, reflecting an 8.5 million dollar improvement as compared to quarter one in 2019.
Again, a great results for the company.
Net sales were negatively impacted by the kobin across the globe, resulting in a year over year reduction a 14.4 million.
The sales decline was concentrated in the month of March.
Despite this we generated positive results.
Operating losses were reduced by 50% year over year.
Versus the same period in 2019.
Reflecting a 340 basis point improvement in operating margin.
Adjusted EBITDA at 2.9 million improved by $4 million year over year versus the same period in 2019.
This reflecting a 240 basis point improvement in adjusted EBITDA margin.
Operational improvement initiatives and SGN a optimization actions supported these results as reflected at a 280 basis point improvement regarding cost of goods sold and a 14% or 5.5 million dollar improvement in SGN a related costs compared 2019.
Actions taken in prior periods, beginning to show value during the quarter I head count actions, where severance related expenses rolled off.
Turning to page six.
Each time, we presented results we highlight the advancements and improvements we are making throughout our operations corp. across the globe.
We celebrate these successes the steps that are part of our plan to return to the profitability levels that we expect for our business.
With so much focus and rightly justified uncovered 19 of its downside impact I wanted to highlight how we leveraged the time and available capacity, resulting from the shutdowns or slow downs to accelerate further continuous improvement tied to our lean transformation plan.
And we view this page you can see that we remain extremely focused on continuous improvements during this slowdown.
We achieved great results in a reynosa metals location during the quarter.
The location was a bit unique emetic continue to operate through March and April but for a week shutdown tied to a government mandate.
With volumes being suspended for OE customers, we applied our resources and took advantage of the time to implement significant improvements on our shop floor.
In summary, the team performed exceptionally an accelerating our plans into the period.
The 32 lean events and seven kaizen events that were completed during the period resulted in remarkable improvements as evidenced by.
Freeing up over 40000 square feet and floor space for the same volumes.
Improving throughput performance infected cells by over 60%.
Improving first time quality performance by 3100 basis points, which impacts scrap rework customer satisfaction and overall are we.
Labour demand was also impacted positively as you would expect through these actions.
The transformation of this facility as well as others around the globe has been incredible and is presenting a solid base for us moving forward.
Turning to page seven.
The cobot 19 advancement across the globe was rapid and severe we at horizon recognized early the need to change our methods and to address through these methods and protocols, the health and safety of our employees and dealing with this new threat.
We successfully initiated remote work plans for our administrative activities in certain operational functions as well and have remained highly effective and productive during these changes.
For those that are operating within our facilities. We've deployed safety protocols that are consistent with CDC recommendations state and local requirements, along with adding in our own incremental requirements.
I'm extremely pleased to state that we have had zero confirmed cases of the virus impacting any of our employees thus far.
We continue to enhance our plans and we'll continue to be flexible for adoption of any new methods that would be brought forward by any quarter that will further improve the protocols. We currently have in place.
Turning to page eight.
The Big question that is surely on your minds is what does the company done to address the impact of covert 19 interruptions on our business next two pages highlight these actions and the impact of them.
We are one team at horizon, recognizing the challenges that we would face in the short term, we took early and decisive actions as a team.
Leadership stepped up with temporary salary in certain benefit reductions.
The actions were taken across all levels within the company as well as at a board level.
We opted not to lay off or for low any of our U.S. based employees either hourly or salary, we chose to support our employees and not place them in the unemployment pool.
Each of our employees part of our team and albeit that we took actions tied to based compensation and for our hourly were workers to the hours worked per week, we kept the team together.
We protected their employment and their critical benefits during this unprecedented times.
As a management team, we set our goals tied to this crisis into two overwriting principles.
We would enter the shutdown well organized but aggressively and second that through this organize planning we would position ourselves to be extremely efficient when the restart activities would begin.
We have done both and with the retention of our employees. We are now in an excellent position with talented and well trained employees to lead our operational restarts, which is occurring now.
In Europe, we transitioned the majority of our employees very rapidly and efficiently over to government programs for the most part the employees retain their realized incomes at constant level. During this period with the company grossing up beyond the governmental programs, where we acquired to do so.
As a major transition and it was completed and roughly 48 hours from start to deployment.
The European did team did an excellent job with this.
While our operations have been impacted across the board, we never fully shut down our operations throughout the pandemic even through today.
The strength and continued demand from our aftermarket retail and industrial channels kept our north American and certain European sites open throughout even under significant volume reductions.
We secured government loans and grants in both the U.S. and France, along with successfully locking in participation and government sponsored payroll coverage and tax deferral programs.
We negotiated and secured through our leaseholder partner certain lease in Red deferrals across North American Europe.
This was a great team effort and we sincerely thank those who worked closely with us.
Our supplier partners also stepped up in certain cases to work with us as we collectively define the plans to address the working capital demands that we will face as we ramp back up to full full volumes.
This will be a challenge for the supply chain across the board and we jumped into this early and broadly.
Our supplier partners are critical to us and they stepped up to support us many occurrences.
As you can see we've addressed the situation across the board and we'll continue to do so as we pivot hard to returning to normal production levels, which has recently began to take shape.
Turning to page nine additional details and actions we have taken relative to liquidity and operations are summarized on this page we successfully refinanced our us candidate Abbeel and we utilized it as we drew down $19 million to optimize our liquidity position during the pandemic.
Our lending partner was supportive and recognize that we were taking prudent actions early on to address the situation as it was unfolding to us.
On April 20, Onest 2020, rising global company LLC, a direct US based subsidiary of Horizon Global Corporation received a loan from PNC Bank National Association for $8.7 million.
Pursuant to the page debt Paycheck protection program under Division a title one of the cares Act.
The pp PPP loan, which is in the form of a note dated April 18th 2020 issued by the borrower matures in April 18th 2022.
The pp loan bears interest at 1% per annum and is payable monthly commencing on November 15 2020.
Funds from the TPV loan maybe use for payroll cost used to continue group health care benefits rent and utilities.
Under the terms of the TPP loan certain amounts may be forgiven. If they are used for qualifying expenses as described in the cares Act.
The company submitted this PPP loan application in good faith in accordance with the cares Act and the guidelines issued by the small business administration, including the Sps Paycheck protection program loans frequently asked questions.
The F. accused.
Subsequent to the company. The application then receipt of the PPP loan proceeds we SB eight issued guidance that provided uncertainty regarding the companys eligibility to receive the PPP loan.
We have sought clarification from the United States Department of Treasury regarding our eligibility in the meantime, we continue to assess the epic use and the other new guidance issued by the FDA.
Absent clarity from the U.S Treasury, we will evaluate all available options relative to it including retention or return.
If the company retains the people will be loan we will continue to use the PPP loan proceeds in qualifying expenses. However, there is no guarantee that any portion of the PPP loan proceeds will be forgiven.
We also secured a non collateral base 5.5 million low interest loan from BNP in France.
As earlier stated in my comments, we have secured an estimated 8.3 million in payroll refund related recovery in Germany, as well as similar programs and certain other countries.
We are now operating in virtually all of our locations globally and our rapidly accelerating in volumes.
This is starting to move.
I will come back for some highlights regarding quarter to and with closing comments later, but for now I'll turn it over to Dennis Richard Grill, Our CFO Dennis take it away.
Thank you Terry good morning, everyone and thank you for joining us.
Please turn to slide 10 for review of the company's consolidated results for the first quarter of 2020.
As a reminder, all results will be on a continuing operations basis.
As a result of the company's sale of its apex segment in the third quarter of 2018.
APAC is classified as discontinued operations for all periods presented in horizon Globals financial statements.
Therefore, they are not included in the discussion of ongoing results.
Consolidated net sales were $163.3 million decrease of $14.4 million or 8.1% from the prior year comparable period.
Net sales continue to be suppressed by the impacts of currency translation.
On a constant currency basis, net sales decreased by $12.3 million or 6.9%.
We have strong sales demand in operating results through February compared to the prior year.
Demonstrating that our operational improvement initiatives are taking hold.
Our net sales were impacted by lower sales volumes associated business interruption due to the economic uncertainties in all of our end markets related to Colby 19 that began in March.
The net sales decrease was primarily attributable.
$8.4 million of lower automotive OEM, and OEM sales and our Europe Africa segment.
Yes was the result of lost production days in the latter part of March due to Oems curtailing production in alignment with plant closures and economic uncertainties.
In response to covert 19.
Retail sales decreased 4.9.
Million dollars in the Americas segment.
The overall decrease also reflects the 2.1 million dollar impact of the first quarter 2019, Divesture of an encore business in Europe Africa.
Operating loss improved $6.7 million from the prior year comparable period.
We reported favorable performance with an operating loss of $6.7 million compared to an operating loss of $13.4 million in the first quarter 2019.
Increased gross profit coupled with SGN a expense improvement helped drive the favorability in the quarter.
The improvement was attributable to lower scrap costs lower inventory reserves and outbound freight costs in the Americas segment.
In addition.
A onetime 4.3 million dollar charge related to the settlement of a potential product liability claim in Europe Africa that did not reoccur in the first quarter 2020.
And SGN a expense improvements in personnel and discretionary spending in all segments.
Our adjusted EBITDA agree reported income of $2.9 million, just $4 million better than the 1.1 million dollar loss reported in the prior year comparable period.
Hi, or adjusted EBITDA.
I was primarily due to the Americas operational results.
In the quarter more than offsetting underperformance in Europe Africa, which was primarily attributable to the cobot 19 economic uncertainties in the region.
Now, let's turn to slide 11 to review the segment performance for the quarter.
Net sales in the Americas were $92.4 million $3.1 million lower than the prior year comparable period.
Net sales.
In the retail and industrial channels were $6.3 million lower than the prior year comparable period as a company flex down.
Operations at its manufacturing and distribution facilities.
As a result of the cobot 19 pandemic.
These decreases were partially offset by aftermarket and ecommerce sales, which increased $2.6 million and point $7 million respectively.
Net sales in the Americas also reflects increasing sales discounts returns and allowances related to retail channel fines and penalties compare to the prior year comparable period.
We reported an operating profit of $2.7 million compared to an operating loss of $1.5 million from the prior year comparable period.
Higher operating profit was primarily driven by lower scrap cost and inventory reserves.
And lower outbound freight costs. In addition to improve desk DNA expenses related to lower distribution center and personnel cost.
Adjusted EBITDA increased to $6.1 million in the quarter as compared to $1.4 million during the prior year comparable period.
Transitioning to our Europe Africa operating segment.
Net sales for the segment decreased $11.3 million or 13.7%.
To $70.9 million compared to the prior year comparable period.
This decrease was primarily due to lower volumes in the automotive OEM and yes sales channels totaling $8.4 million.
Due primarily to the coal bid 19 pandemic.
Related economic uncertainties as Oems curtailed production.
I am at the plant closures.
Europe Africa net sales were also impacted by unfavorable foreign currency translation.
All said after adjusting.
For the impacts of currency translation and removing the divested non automotive business mentioned earlier net sales decreased $7.2 million or 8.8%.
We reported an operating loss of $2.5 billion compared to an operating loss of $3.2 million from the prior year comparable period.
Reduce loss was primarily attributable to SGN, a support cost reductions realized through prior year restructuring footprint rationalization.
And a onetime 4.3 million dollar.
Prior year charge related to the settlement of a potential product liability claim previously discussed.
Adjusted EBITDA was $2.3 million for the quarter, a decrease of $1.2 million over the prior year comparable period due to lower sales volumes mentioned earlier.
As we discussed in our fourth quarter earnings call.
On March 13, 2020, we refinanced our revolving credit facility within Sina business credit.
Facility provides for principal amount.
$75 million and may be increased by up to $25 million in increments of $5 million.
The revolver is secured by inventory receivables in the U.S. in Canada.
But unlike the prior facility in new facility is not secured by any collateral in Europe.
The interest rate as LIBOR, plus 4% with a 1% LIBOR floor in term of up to three years.
Revolvers Covenant light with only a limit on capital expenditures, which provides us flexibility to execute our strategic plan.
Proceeds were used to repay the outstanding balance of the existing ABL facility.
The new credit facility generates increased liquidity to support the business and our strategic initiatives.
Now moving onto our balance sheet and liquidity position on slide 12.
Trade working capital totaled $79 million for the first quarter 2020.
Which represented a decrease of $17.4 million as compared to the first quarter 2019.
On a decrease of $10.6 million compared to the fourth quarter of 2019.
Specifically accounts receivable increased $13.2 million to $84.9 million from the prior year.
Day sales outstanding was 47.
Decrease of five days from the prior year.
Inventory decreased $17.3 million to $119.4 million from the prior year.
Based on hand inventory was 79 days a decrease of 11 days from the prior year.
Accounts payable increased $4.9 million to $83.4 million from the prior year.
Base payables on hand was 55 days a decrease of four days from the prior year.
Turning to capitalization and leverage on page 13.
As a result in the pay down of our first lien term debt in the third quarter 2019, and our liquidity management.
Partially offset by increased borrowings on the NPL during the quarter in response to the economic uncertainties of Cobot 19.
Total gross debt decreased by $161.7 million.
$439.8 million in the prior year.
To $278.1 million in the first quarter 2020.
Taking all that into consideration we have significantly decreased our leverage.
Year over year basis.
As for liquidity, the first quarter of 2020 told $50.8 million.
Which was comprised of $12.1 million of availability under our ABL facility and cash on hand of $38.7 million.
We believe the company is able to meet its liquidity needs to run the business and deliver our operational improvement initiatives.
Including managing through the economic uncertainties and business disruptions related to cobot 19 that will impact our business.
With that I will turn it back over to Terry for his closing comments.
Thank you Dennis nice job and thank you for the leadership you have provided the company during this period.
As we look at page 14, we are presenting some indicators as seen during April and May.
While we are not providing guidance, we felt very strongly that you should be able to see what we do relative to operational status and volumes.
It may surprise many of you that we didn't completely shut down our operations with the emergence of the virus.
While in Europe, the majority of by States, where shutdown in North America, we continue to operate but at a reduced level.
Our product sales channels outside of the direct OEM continued to purchase from us.
We are recognizing the solid improvement in sales from April to May while remaining depressed sales have jumped by roughly 2000 basis points for both North America in Europe, as compared to pre coal that level planning volumes.
Last week, we are up to roughly six deeper sense of our plan in North America, and 41% of our plan in Europe.
North America was tied to non OEM business, while in Europe, the Oems began their startup.
In the second chart, you'll see that our operations across the globe were also in restart or acceleration mode. These operation capacity performance metrics have continued to improve week over week and there and are now reflecting several sites operating between 70 and 100% levels. This is a good sign.
As the Oems restart and ramp up volumes around the globe, we will see this improve even more.
They remain potential headwinds tied through our recovery plan as you would assume.
While there are great indicators of improving customer demand for our products the uncertainty of the economic environment and of the virus lingers.
We will look forward to the best outcome, but we'll plan for the worst as we look forward through the rest of the year.
Recent I Hs vehicle production volumes.
Our down significantly in North American Europe, while we're seeing increases in our aftermarket demands.
We have retained a high level of our liquidity through the period position us to address the upcoming demands of volume acceleration and the impact of working capital that comes with it.
There is a long way to go as we sort through this but we are seeing business return.
Sustainability in volume is going to be the key.
Turning to page 15.
In summary, as we close our presentation for this morning. Please note.
We have strong momentum leading up to the onset of the co bid pandemic.
In spite of the significant March impact on operations around the globe pertaining to the cobot virus, we posted solid period over period results.
We took early and decisive actions to mitigate the impact of the buyers on our business.
Relative to health and safety, we deployed strong protocols and thus far have had no employee with a recorded case.
We fortified our liquidity position through through solid fundamentals and through grants loans and deferrals.
Reflects their operations aggressively while positioning them for efficient returned with demand.
April and May indicators are promising, but we will continue to contingency plan for headwinds relative to volume sustainability and for the uncertainty of the virus.
Thank you very much for your participation today and now I'll turn it back to the operator for questions.
Thank you you will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before passing the keys.
Withdraw your question. Please press Star then to.
At this time, we will cause momentarily to assemble the roster.
So first question today comes from Josh Nichols B. Riley. Please go ahead.
Yes, thanks for taking the time and glad to hear I won't say no reported cases.
Cobot.
I Didnt want to ask since you mentioned.
The started up on velocities OEM facilities now how do you feel about the companys inventory levels to kind of beat demand discards the level and the mix here.
Yes, Jeff first of all good to hear from yet.
When we when we look at the sales decline and when the sales declined hit US right. It was it was really rapidly. It was concentrated at the end of March middle Middle to the end of March which left us in a inventory position.
Where we were supporting normal demands. So it was just cut off.
So when when operations went down our inventories were were quite strong because we were supporting big demand.
Case in point. This morning, we were looking we do a review each morning eight so before this call is on that call.
And as we looked at planting volumes for North America use North American as an example.
And we looked at the all we demands that we have with releases that are being update.
So we've got coverage now through into June.
The ramp ups that we see for both our Toyota customer and Ford customer.
So we don't have to react immediately so if there is a little bit of a lag in our startup or anything that would impact us. We are covered from a finished goods inventory.
To match their demand out a couple three weeks, so we feel pretty good about that in Europe, it's more the same with that.
They started there always on the early but all we started a little bit earlier, but they are staggering right. They start up they slowed down the have high high demand for line fill in a drop off a little bit as they catch their footing and get a flavor for the ability of the sub supply chain there some supply chain to support them.
But overall from a company this company weren't a good position from an inventory position to support our always.
We are seeing however, we're seeing an increase in our aftermarket demand.
Pretty sizably.
Week over week over week.
And we're playing catch up a little bit in terms of.
Inventory positioning and rebound.
With that that we have buy sell so the buy sell segment, we're working hard to to increase that pipeline as we're seeing a marked increase in demand, especially in the U.S.
Thanks, and then.
Can you comment a little bit like whereas the company's liquidity situation today I mean, obviously a lot has changed.
40.
Five days or so you mentioned you still had you retained a substantial portion on the liquidity I'm just trying to balance some of the headwinds with the business, but also some of the some of the support the company's received from various state and country.
Yes, as Terry mentioned this is Dan as Terry mentioned.
Are we maintain.
Good portion of our of our liquidity has gone down some but we are in a good position.
Going forward so.
And not in North America, we drew down the line and.
So weve maintained our liquidity and in North America Europe, we are.
Taking advantage of payroll refunds and tax deferral programs.
To help maintain that liquidity plus we picked up we picked up the French loan and we got a nice.
I'll call nice support from both some sort of some of our suppliers and our leaseholders.
But overall Josh we.
We gain this thing a couple of ways in terms of outward looking so we've got a a base forecast and we got a low end I'll call. It the headwind forecast.
And we're managing our our liquidity across both mills.
Okay.
Did you say is a.
Ill now all facilities like fully drawn as of today.
No it's not it's not something that aren't.
As I mentioned, there's still too again in Q1, there were still 12 million availability on the.
Got it. Thanks last question can you provide a little bit of clarity you mentioned I know you you.
We're able to receive some funds from the PPP, but there's a little bit of a question regarding eligibility could you just by the little bit of additional detail there.
Yes, when we when we submitted we submitted and the eligibility for the PPP was based as you said bolt on size indeed.
And at that time.
Our of our application and the receipt of the PPP loan proceeds we met them both right with with no questions right. No further epic use that came out.
At that time after that however, subsequent to us receiving the proceeds the FDA issued additional guidance regarding the PPP size base criteria right. So specifically the size base and that was tied really to affiliation rules.
And so the guidance this creates some uncertainty of our ability to satisfy that size base criteria.
So in light of that and with the evolving guidance I think you probably are aware there's epic use that continued to be issued now were up that number 46.
I believe that would be last one.
We have sought clarification directly to the department of Treasury regarding that criteria.
And more more specific to those affiliation rules that were included within it.
So absent absent. This we would expect to return to fund that we don't give any guidance.
But if we retain them, which we should.
Well climb appropriately just keep in mind that we did we didn't let anybody go.
We held on tailored us based employees, which was that the premise of the whole.
Program the begin.
All right.
And then last question for me like.
This is.
Precedent times of course, but with the auto industry plants being shut down for some time do you have any idea or thoughts on what the cadence of the startup startup is going to look like there's clearly been an increase in incentive spend.
The other Oems.
Is it something where you think they're looking to ramp up very quickly or is it going to be kind of a measured pace here.
It's a mixed bag in terms of intense and what I think the reality will be.
Obviously the.
The engine of the automotive companies that they want to get back and they want to get running.
They've all expressed in they deployed.
Safety protocols that are are really looking out for their employees and I applaud them form we're learning off of them too right. So.
They are doing a great job there and their challenge will be the challenges that we all that is is what is the uncertainty of this virus how does it how does that play as thing.
Get back to some degree of normalcy, even with even with the counter measures that are out there.
And then second how does the bulk most importantly to them is how do we as a sub supply chain to them. Their total supply chain, how do we react and ensure that that the pipeline of materials that would they were experiencing in the managing.
In advance of this can come back and sustain itself.
So I have.
And precedented confidence in the always to do the right things and to manage as situation internal to the walls of the their plants.
It's extending beyond that the economic side, what is the economic conditions going to be towards vehicle sales.
By the consumer and.
And then what is the impact of that the supply chains ability to manage through this crisis themselves.
I talked a little bit about our what we've done to position ourselves for the working capital demands that come with the restart the longer. This goes on receivables are not going to be in line for that.
Supply chain, but payables in the demands to too.
Take on cost of working capital is going to be.
Pretty extensive it'll be one side it will be one sided for well so.
I think they're going to do fine I think they the the return is going to be based upon two things consumer confidence and and purchasing.
Trends.
And the ability to supply chain to start the.
Thanks, and then last question for me I guess.
Thanks for providing April may highlights.
Slide deck rise a little bit more color on what's going on.
Are you a little bit more optimistic for the things starting to get back a little bit.
From a more in the North America or are the European market. It could kind of contrast, those a little bit that would be helpful.
Yeah, and as I said, there was it theres a complete.
There's a difference complete differences in how we had to react.
As a company Europe versus.
North America.
So the European side.
The mandates were.
Significant severe.
And then our concentration than OE business being about 70% OE business and in Europe.
Resulting is really taking down our operations. So they went down fast and they went down efficiently, but they went down fast to a complete shutdown other than.
Our activities to support future programs and and certain deliverables that we had to have nonmanufacturing related but more administratively and engineering was.
While in the us or in North America.
Our 70% the other way in the aftermarket retail industrial type stuff.
Those demands continued throughout this whole period.
Now it didn't look depressed like I said, so it was reduced but there were still.
Avenues for sales.
So we partially shut down.
Our operations, we did restricting and we took down certain hours.
Work load.
And but we kept everybody employed and we continue to shift throughout period. So it's kind of a tale of two two regions dictated primarily by the distribution of the business between the aftermarket and OE.
One being 70 30 in the OE side being Europe, and the other being 70 30 towards the aftermarket not only in North America.
Yeah.
Thanks for the color or how about kind of Q.
Thank you at this time, we have no further questions I would like to turn the call back over to Mr. Terry.
Well in closing I, just want to say thanks for for the support the interest and participation in the call. They can see that our team has performed pretty darn well, we're very proud of the activities that the team has done.
When we look forward to emerging out of this stronger better.
And as seen by some of the activities that we pulled into a pull forward into the period leveraging time available that will come out stronger than ever. So thanks and will afford to talk to you again.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.