Lincoln Electric (LECO) 27 Apr 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Lincoln Electric Holdings Incorporated First Quarter 2020 Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to Butler, the Relations. Vice like speaker to now Amanda today, President would hand conference over your I of Investor you, ahead, go and Thank ma'am. please

the Welcome First Thank as Lincoln earlier well Relations slide Lincoln an today, Investor find the released morning, attachment and can you, results Electric everyone. as you at release Chris, our financial on Electric's Conference lincolnelectric.com, Quarter Web presentation our XXXX and Call. to We good call's in to section. site, as this

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start materially Before factors. and of and differ during our filings forward-looking, in may results our statements XX-Q. XX-K discussion due risk and a some risks release and may that A results uncertainties our are actual number may provided made of forms that this to of call certain our the be we affect press on expectations from please note discussion, in SEC our

of A the tables of which, found discuss release, we measures is Relations in available reconciliation GAAP. addition, financial the at In Web non-GAAP is site, in earnings U.S. most not measures again, our do financials lincolnelectric.com. our GAAP section to to that the in measure Investor comparable conform

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Good Thank everyone. you, morning, Amanda.

our years and I'd been who smooth the be knowledge Vince to to but of outstanding a like leading us ensure CFO brings position. formally started, as and as is XX call transition. has Vince Lincoln our a the for new will get experience I CFO his with Gabe stepped to continuing me for with Bruno, like thank Gabe CFO, down we to work Before Lincoln Electric. wealth contributions with to introduce has to and Vince today. would

decremental decreased the at first our adjusted quarter reduction an operating through our price difficulty] basis X.X%, $X.XX and quarter only declined sector margin income achieved declining margin quarter. of performance business as earnings margin per all Adjusted share infrastructure essential to continued mix, substantially the we XX.X% resulted the operate to across XX sales first and challenging actions. facilities, in XX.X% increasingly performance in Looking Despite cost favorable per benefits environment. points in This an quarter, share. of on our [technical in an to cost, XX.X% return

made XX.X%. year. were Cash flow generation but reflected strong flow the free improved versus cash with Returns ROIC at prior seasonality,

returned $XXX shareholders million We in a rate, million repurchases payout also combination our the and $XXX through in of to quarter. dividend X% higher share

strong challenging ready As the ample from for we more benefit we and quarter, as liquidity ahead. a balance the conditions ended sheet we business

perseverance maintaining and during been the serve slide has our employees organization, operations safe customers. priority we team resilience have our shown time. to our this Moving while great four, Across keeping

in protocols, flexible and and procedures other implemented implemented Organization-recommended actions. working have addition exit CDC practice aggressively new many and include entry distancing, World and hygiene the to social Health have best We screenings, sanitation remote that arrangements, and

We're federal recommended. monitor authorities. to continue as guidance new local actively and We measures from adopting

which quarter we was achieved. Secondarily, maintain supply the to steady focus of of first product, operations a

closures. chain operational regional inventory disruptions we and local expedited as materials select established or potential contingency teams measures, mandated of ahead needed, excess and raw supply Our built

business procedures March. one of aggressive locations protect were did The closed not levels customers. new but shutdowns, orders our any mandated normalized global our Chinese month During five due early resumed impact many global instituted when from serve to government COVID-XX mid-March to facilities until to the experience safety for by employee continuing our quarter, approximately balance material to of while

last expecting the to the second two more in and three chain activity of during As conditions demand to in facility increase expected in business. we're higher the risk operating March, of weeks challenging compressed quarter. customer operating are in and continued disruptions lower possible significantly inefficiencies supply the closures An result

Moving sales prompted trends quarter, channel the COVID-XX HVAC reduction actions. compressed regions the an Welding an a challenged in in sales expansion saw higher in retail impact, first our five, the Harris segments contracted, looking and industrial activity. increased demand deceleration to late organic All two slide quarter, our already as on further which in while sector cost

automation in sales organic sectors rate, a Looking most double-digit at equipment by rate. systems mid double-digit at in orders percent compress closures. trended percent significant and rate. both March, single-digit we've and demand. customer the a Since percent Generally, to due range market XX% at mid low continued sales a primarily low have declined consumables products, seen to April month-to-date a end declined deceleration

three over partial there appear data suggests the the be order discussions second the have re-openings, trough Our to is weeks, and limited quarter around while patterns should government visibility and in demand. last troughed from that customers the

unknown, XX markets XX% and main have of been over declines provide unique performance historical months end an the While compressed some the recent equivalent and each to of to down timeframe. range peak-to-trough outlined XX Generally, recovery perspective. shape the is with have cycle we've the prior in our across is recovery mid

in over will lower I outline our to Vince actions taken the business. now, impact of And turn the the have we to call the demand mitigate

Chris. you, Thank

six, the that slide actions in first manufacturing froze the wages. reduction $X discretionary travel, with further to demand. hiring quarter, and new and achieved quarter headcount XX significantly we week prior we overtime, and In the temporary hours In benefits rationalization commenced to eliminated deferred to of increases. actions. main from benefiting our approximately operations, spending, we align we eliminated from and have three April, actions and in in per and reduced wage are U.S. hours reduced quarter primarily In closure we Turning cost all our million the expanded facilities,

to expected XX% realize to $XX in expected $XX in million cost savings now are of annualized reductions. is cost actions Our permanent to which reflect XXXX, million

to permanent savings exit between through year. anticipate and million an charges $XX generating expect in in per of We $XX additional charges balance to XXXX million cost in first $X.X the incurred million million quarter. the quarter, We $X $X and the rationalization rationalization in pretax incurring million

has further appropriate in We of cost shape of reduction for phase determine us to carefully reductions timing on will second lack visibility recovery over as and the actions of the are timing prepared The implementation quarter and progresses. cost time. the led the

balance debt Turning provides well ability at are conservative gross us profile through this positions X.X times an investment-grade our to slide debt challenging with confident we to us below seven, times Disciplined debt of gross to which in covenant. our period. to management X.XX our EBITDA, EBITDA sheet navigate

confident We working benefit expect credit current ample have position. in to reductions endure $XXX from liquidity ample in generate We and a million cash of room in from flows severe capital. and lines, our cash demand available in to liquidity are contraction and

cycles, cash greater expect remains flow As XXX% in we conversion. cash than past strong, and generation

maturity, debt XXXX. long-term addition, debt August is In first our maturity in our long-term

to temporary capital have we allocation eight, plan. our adjustments made slide to Moving

to the approximately growth are This initiatives. million continue products, in XX%, CapEx range. assets. We spending to focused opportunistically now million by to estimated on is M&A investment reduces primarily prioritizing to cost plan our which be $XX now We capital evaluate reduction, and do $XX XXXX tuck-in new activity

repurchases suspended program, maintaining our we dividend are the share in buybacks in temporarily but We after quarter. have $XXX million also spending first

we start when see to We to conditions improve. repurchases expect resume business

pass our also successfully organization would staying who and all more new will build cover with of and navigate on that to the worked this help the I upon been Lincoln investors pleasure am Gabe I through and and my analysts, work our accomplishments the his to I've period an I congratulate the with in has would on results long-term role over to Before you. detail, to It achieved, honor quarter strategic like will Gabe goals. thanks extend focused call to like he confident the years. while to has first I a some

Gabe?

Vince, you, Thank everyone. and hello

quarter our Welding volumes segments. from first our demand to sales X.X% slide in by decline led lower X.X%, in nine, an decreased Moving consolidated

with cost reduction of gross Our was to due margin actions. mix, benefits quarter first steady positive generally prior price profit the costs, and favorable

Our SG&A SG&A by The expense dollar X.X% terms, increased ratio to lower XX.X% driven in points discretionary and declined employee spending. basis of sales. XX costs

included XX.X% activities. sales. and of to Reported results item income $X.X special primarily decreased Operating to to cost rationalization our operating charges international million, million related related severance welding from asset in approximately income impairments, $XX.X reduction or XX.X%

point or quarter. a point the decline to operating decreased XX.X% Acquisitions special these our sales, operating Excluding year. income margin a impact basis to XX.X% XX million, of items, the in XX prior income had $XX.X diluted basis adjusted adjusted versus

favorable and performance reflected Solid mix, cost, actions. of cost margin reduction the lower benefits

quarter increase rate The items earnings. first primarily the first discrete XX.X%, in adjusted of effective effective the or adjusted XX.X% basis. year tax and to was Our in compared prior was with on rate XX.X% reported and an quarter's tax period due mix

mid tax expect be of We in discrete anticipated earnings of average Considering rate the XXXX of tax to XX% effective and our mix items. the future balance the extent range.

benefiting earnings year. decreased a First XX.X% compared prior the quarter share basis, to to adjusted $X repurchases. per per diluted $X.X from decreased share diluted $X.XX, XX.X% with share in earnings $XX an On

Now $XX.X costs, acquisitions. XX, the lower reduction declined in adjusted points slide price XX.X% the adjusted on to moving Americas favorable XX volumes and mix, Welding margin benefits positive EBITDA lower basis first million. quarter dollars help from The costs, cost XX.X% as segments decline actions to mitigate Segment EBIT to

would basis Excluding acquisitions, EBIT XX margin declined points. have the

X.X% single mid-teens declined automation rate. Americas top organic a declined equipment at percent sales X.X%, at percent due both digit Looking to welding a declined volume, at the high line, primarily consumable and rate sales lower and

basis to International reduction of decreased and million and in Moving offset lower margin the points XX.X% benefits and adjusted slide $X.X the EBIT adjusted XXX discretionary EBIT X.X%. to Europe Asia-Pacific Welding declines declined cost Volume spending. activities segment's to XX,

XX.X% excellence. Moving points million. to retail in favorable to XX.X% The XXX channel, on adjusted and the operational from increased basis EBIT EBIT Harris from adjusted quarter Products the Group, increased higher $XX.X first margin continued volumes to improvement mix

that, to to over before the call I take would turn questions. like Chris With we

ensure to swiftly align demand to our safety who given second also need prepared quarter. with critical customers progress to you, tremendous Thank as and while employees, We're and are lower business the business Gabe. agility we customers our have the We've to communities of mission to of serve operate applications. implement the and and the further flexibility the measures acted monitor continuing managing

have development the advance product and to continued initiatives Our quarter. commercial in well as

at beds designed, customized manufactured patient delivered Field Group days five delivers a developed, in York team Products City and New to system Harris oxygen a Our hospital. distribution gas that individual

The engaged of American to and navigate with this support worldwide of government webinars. COVID-XX solutions restrictions, and our continues we've online, year. and new commitment provide generation be systems digital to continued teams. customers our cash new to strong gas, product to products new launch healthcare in of social the XX this Harris and using help unprecedented threat. oxygen over the and challenge commercial travel dedication we'll educational live to strength platform our In X,XXX ability distancing, North the regulators We're team and confident the in of balance to global sheet, flow customers our our respond era and rapidly digital demonstrations engage Year-to-date, team deployed a agencies a

call Thank you I to questions. the and the pass now Operator will back for

of Instructions] Wertheimer Melius [Operator our you. Research. the line question Rob first Thank comes from with And

Your line now is open.

good and everyone. you, morning, Thank

morning. Good

Good morning.

but or and [Ph]? compare and 'XX, to Can on of you're granular, trying at we just orders. sort bit commentary on little is you downturn] a -- -- trying sort and depth look the out, how it figure deep how you noticed contrast and anticipating to of I two really but in seems trying how worst your of months gave can weeks, or out compares though nice that to play depending kind and Thanks. periods doing order to as longer this whether some worst I'm good It gets bottom responses things staged the [and time as a you're you're as downturn, manage then of it? through whatever

to 'XX the is to challenging to to this I how trend the here as Look, understand the but we a and downturn. several in and may dynamic it try the next over the compare weeks, change the we question, we saw able data think certainly swiftness Rob, you the the of 'XX, I can business in it's appreciate Yes. that was Chris. window be imagine evaluate as

diligently, down, low turn as it and to you welding started been then for pretty the we global with of globally in the say the where part we seeing We early XX business a from this out sit with know, shared very and saw March, impacts down We've today. pretty perspective, middle tracking XX, I'd data were the our operations. of we when So, today, days. you that materially, the last XX% China turned COVID-XX

that an two middle have got next part to upturn this bottoming some of Our to confidence in five-day, XX-day, appears see data some over the to more the the trend confidence to this level. and trend of more to and at to that like that I'd like why see show That's XX-day get it. see we in from data. a three if to weeks. I'd data data towards Maybe beginning see bottomed May we've

continuing few a a swift, and creates make is challenging Got business great the one we'll watch confidence different change trying when team our prior to ability around got is of continue data sure as the world. versus environment. through 'XX We've got to as a migrating that managing that material. that the balance this mind. pattern, and I've the importance frankly teams Certainly Certainly QX. data health. keep watch you're three we as an this through in 'XX front that but essential Certainly to continue the that versus was the the here next we're to that quite over And data of employee sheet; a the a We'll to this lot drop done the from here to for hopefully dynamic see weeks four operate of weeks our next certainly employee time cycle. processes all time great differences ensure improvements leadership to more safety. of in we're over invest very job have 'XX more 'XX to a navigate and in some And in

thank Okay, you. follow I'll Thanks. up.

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Yes.

Gabe Vince new Good morning, roles. to congratulations and on your and

normalized you in you Do in can other to order saw think early China, what mentioned You reaching if normalize? levels when to in expect would you apply regions, March. China levels so, levels and you order

our order X% order and to we normalized minus going saw More days, Certainly those difficult us saw imply numbers States. to Europe more we or that move to of level. plus we normalized within China larger prior and year, type dynamics in in businesses for provide the that certainly in that China, United recovery. it's back that to seen business Well, XX are versus a that happy being replicate across XX have

our our that Electric, improvement, Lincoln whether us data, continue see why to if portfolio mitigate longer actions back XX say business, this If point U.S. the just you recovery our in to have, were take further it's as [EMEA] that we to that determine [ph] a that's we're of the business, the imply at challenging well business, markets. would to those at probably to extrapolate rest and need that the European business we or over going next across in to evaluate too start as XX should demand our we days, in across downturn a to for to but

from April, market within can And on impact region? you I order seeing are appreciate by then you that. And color you saw the what declines destocking? just XX% or some in provide any end

starting the you in in say that would have where the any Asia-Pac, levels. context can't destocking now tell start average, expect, levels, see enough business slightly return believe that seen the swiftly you and significantly seeing end that pandemic by with from the not or heavy the to of as been an And you've we we're And more but earlier average, be the seen the that, obviously surprising is numbers impact. transportation, market these about impact businesses. we and industries in normalized hit of slightly that seen what with perspective, then automotive, that numbers to have within virus would we impact and see I China Well, drop to those Europe. more I've the unfavorable know Europe I was numbers Americas certainly demand when the and to marketplace trending this actually have the we'd the from than favorable

I appreciate so the much. color. Thanks

from comes with Thank Joe O'Dea our line Vertical you. the next Research. And question of

open. now is line Your

good wishes role, Hi, best Vince, Congrats your on to Gabe. and and you, morning. congratulations new

Thank you.

savings, through million about in perspective. margins cost around related $XX decremental The talk anything flows say to you to XXXX the Of in a And just first how $XX can around quarter? question, cadence willing million you're to margins. the from second expectations that

is So, Joe, Gabe. this

the As savings we've of is identified cost overall disclosed, permanent. we've XX%

that more acceleration and our then into quarter, of temporary to balance progress demand. of driven to by And we expect second So the alignment year. be an that's as the savings going the of trajectory into the

So first had the expect that Vince million in expect more, kind as into the trajectory second. of and $X identified, quarter,

decrementals, in You our level assuming XX% we've would volumes, and XX% think range. current disclosed, low to XXs, which about the has in of Chris decrementals the expect we mentioned

framework saw progressing aggressive pretty that savings, working and in we've and You at we're was been with healthy first towards. identifying but quarter pretty XX.X%, cost that's the the

materialize? range. to sort then as from how know start could things, cost of in doing terms to to really but thoughts half tough back And That's call go XX% of cost I we the front, on the that demand really on based mean, then more of XX% what helpful. the the of And look into I actions you're any XX% -- the then it's side in

see. reasonable a assumptions that's framework, we monitor. to general, Joe, difficult, with believe And to in out I framework the that project just so for we us think volume

I No, that. appreciate Sure.

but maybe that equipment of recovery? leading back When the you You some you trends seen what to look overall months I presumably of the about sensitivity long kind CapEx some helpful trough XX%. see and early was then could we at would the gave demand? of talk with period, terms to have demand think how in out context consumables lag respect out, we maybe demand consumables versus expect revenue if declines you XX with that of and days recovery to equipment go a the in a XX%. down that can And up 'XX-'XX post generally

part the Well, will that our this think very depend point to for continuing and I point that product been committed which of difficult to at will of this significantly estimate. is be. the very continue about shape to to development in at in in recovery, us time invest We've cycle,

coming and investments those marketplace, to looking believe people that see that support recovery to in to products. for capital, in downturn of I out from think new 'XX a but say are and certainly whether that investments continue were of out products should able would the real to swiftness those solutions, you this and invest solutions low in the lead migrates success the back of about from that if And that's we of for provided and new you the some forget our 'XX, at was and ability those especially recovery, then be of one of could look the down when productivity. when Lincoln some that and even to that stories go the been marketplace perspective, contingent the Electric we cost extend shape cycle certainly particular the someone you are bring positioning out, if marketplace it -- moving our a to

the should more when So I'm marketplace. we recovery portion the in I'm the very phase probably feeling able what that than migrate way do positioning our good of that equipment maybe about that be seen quickly migrate feeling also in of we've into because fact to still previously. the

to the products expect those again, have several that most months marketplace to the two I in products to as remarks, in do last the of We intend very marketplace are six have well. nine well, brought XXXX, that equipment to the we prepared centered three into portfolio. are or those very, new my doing continue we mentioned in we products to that we and around bring new and

exposure. gas too, Got XX%, regular how it. of and the -- downstream? remind based perspective, your Can us also of upstream, a that in ask I upstream of midstream, risk wanted think we've to you just then oil about And the down sort kind you to one But from seen on structural market? this and more and what then that XX% XX% XX% breakout just in of volatility particular the revenue on

around XX% gas, mix Well, the to our downstream and that's or now when XX% seen. we portfolio. about global way the some world. within we think we've assets got midstream, that's shock XX%. very we're upstream, that and XX% they'd their XX%-XX% oil within are oil recent the within dynamics about think mix Obviously around That's around never our really permeating marketplace somewhere the just the about industry experiencing the within is they're Certainly

cycles. We seen that across I We've would to be of large would been when dynamics very seen other have what already we tend generally to in versus some those We've some seen and be. understand portfolio, longer-term impact would us say be say cycles gas what postponed. for our early elongated oil projects normalized the still that but they've cycle may than have had a

what when the to and by longer for return the to early tend more being price for mean comfort it segment. a takes months, be appears as oil kind to but in I I oil as to about outlook what's to what that of to that those very in shock being So XX more going us get on about and marketplace we recovery, them think gas cycles XX about slightly about that, think I of think

much. very Thanks

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everyone. morning, Good

Nathan. morning, good Hello,

reduction cost I just for like the to start a actions. with further question potential on

to along to maybe of would further said what progresses, kind what you cost points you are way I XXXX can about decision to enact the actions think see levers and off you there? need talk the pull there as cutting there, what XQ

that exiting as some Well, the some to profile, got migrate material intend improvements we and and data, this I five, to global trends day we've would begin what in that migrate the demand within continue determining we data to tell welding June, May portion improvements mentioned that for seeing the of early to that further within need I XX, earlier of that see XX actions into looking data you we're marketplace, do forward we we're the to move I'll that's the with as in whether portions be within the is business.

cost We that us across levers of have at opportunities would we unfortunately, be of would in and have as would business might the be QX drive to be as impact we'd require themselves. couple reviewing structural those a employee we two probably probably and year. would that little evaluated the and would that imagine, business the take impact more look implementing, it in accelerating very Most QX to and in QX can you this actions trying improvements be that of

moment? foresee and doing being side, you've I on forward, about any receivables extension to then other thinking at in able collection, then the with seen to you about you're you actually that to your and whether suspending you're you customers manage particularly pay cash. repurchase questions their bills couple issues that I'm any decision Can here any whether talk shares Okay, cash. them going things the around XQ said just know a XXXX.

Vince. Yes. is this Nathan,

repurchase the have to and we reviewing shares to decision and we temporarily space. our management our and of until very in as market we industrial we're on the cash imposed very monitoring our to from the in year a compression we're carefully, visibility as flows and be our first suspend in geographic From a management this perspective, very capital attractive purchase price and So that to receivable reviewing cash customer program activities share basis. perspective that times COVID-XX that a components a are payables terms occur from recovery far better carefully expect basis. very compelling managing found and these this the the DSO closely We're quarter, and working cash on our close very end decided

any stretching or so seen any you issues Have like anything of far? or out that DSOs

a a up anecdotal perspective the material level from in are risen our way. but affecting that nothing very has There the macro DSOs issues are specific of well. holding and cases No, of group to

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our with And next Baird. from the Dobre line question Mig you. comes Thank of

Your line is now open.

you. International, morning, Good that just maybe XX% your think how mentioned I in comments. Thank I make than any go little back color less, Americas little understand everyone. to to Harris want declining I on more progressing bit properly. want that April? a April sure I this you to a bit average, is

segments some which piece. around it's applications well component an but that business also of element Not that with HVAC Obviously, is an a maybe within or held you that in welding about little medical as surprising Harris oxygen has it think developed that better the and business. Mig, a just as slightly technologies participating got with. we've is the bit than that the maybe bit small off international average it's a little better associated got when component our than regulators

bit of little at point. So downturn in business up has that held seeing better, this portion we the but in business that a demand the certainly are also Harris

Mig, perspective. trending add that same the just from seeing I a would relative kind we're of

Harris, better out up that to in not businesses we've a the holding the and pointed step latter-half in certainly levels but down the was into first the year-over-year quite Harris than quarter welding but Welding of segment. for seeing March, we're So, the

is if you is variation you that worth there at then from And gave I'm Understood. average us any think perspective but on margins decremental here, that segment level calling the out? wondering

business. in actions got anything the think rate the further do in want think fact relates very our we've the see cycle April. the don't pretty at or certainly Again, we -- believe of to and that the our recognized as material, the see that's QX, like that business, improvements competence our we early manage manage that certainly the I that positioned of ability comfortable positioned see where decremental mean, not just with the can ability will little but this we amplify business, the we've I it if that don't I I to don't business. impact the within take our I the we've cycle. that of have performance improvements that to structure where part point through to certainly structure QX I No, in feel Mig. I margins the of of should through in really like

into automation little looking I see. a April, here. because Then you're sort still meaningful at business in first some maybe structure quarter, the wondering adjusting on doing the color business. your things segment decremental and wondering with me, of this the pretty Americas we've how progressed you in look that more I declines also pretty lastly won cost of obviously for good. I'm I'm seen terms the guess what

I'm going played wondering business forward? that, how Thanks. So automation this you're how thinking about into

I year-over-year line that performance double-digit decline. can you perspective, start and was by telling the a from automation year-over-year top a

cost little it higher overall compression, the on Chris over to level for kick comment and than activities welding around So, business, reduction people. little a the a I'll a

with in certainly and guess, cost mitigate I -- we'd quite some a at some point business benefits XXXX taken the were of that actions the structures challenges you that least had one in the of we our of few associated area. cycle, one this within could Yes, had to exiting as already say

the of QX. associated some that saw we benefits with in So,

it's look anywhere Mig book that, with tends I near that, percentage seeing because wouldn't with other you order have I would that to business. that their when a it longer basis, is The a welding I core we're associated book the products. cycle than you the at down level order tell in as core our thing share

as investments they Now, lagger to more become than capital we're moving there the and that relates some favorable out within order taking need be if be order look our QX core timeframe, May, expected and business to it continue activity as we're could more concern an other is, close and QX. automation performed a we'll challenged at in actions from to may to June perspective, up we celled through impacted, materially it into the may the business, see seeing what and monitor more relatively the business. And but that

tell I North solutions more and continued in that we our people across towards to driving America. and quality businesses improvements in relates in will as here in the and I confidence great will to it more you, see and world investments Although, have productivity automated expectation the still migrate automation their continue

forward. you've just of to savings what the contemplating less and more But or cost in clarify, your segment action, done you're the automation what going terms business average? impacted than Is already

been has automation of decline, other this in impacted than on early our businesses. more now, some welding Right

Okay. Thank you.

the you. our line question next Thank Research. from And Chris of comes Longbow Dankert with

line is Your now open.

good guys. Hey, morning,

might loss what dynamic be on hearty welcome echo a lot of typically we into but in stepping to XQ. growth you the quarter EBIT could granular China and of detail the a the and give quick don't Gabe, guys by update certainly kind just been rate Just -- here. specifically congrats in have get Vince there role Obviously a the country,

as understanding, a -- that became are whether your that an There business You question and manufacturing on we the from would happened the might performance, because think top in your tell don't caller March difficulty erratic from the I performance have online units and line March. end in our of of is phone, year-over-year has I up. of in being know all China that operating in basis again January early year-over-year you are but stabilized. I rebound a you what's running way we've might in during had into was first the it's gist breaking be

tell perspective, relatively that from part business. of year-over-year our both from and So earnings in a revenue that stable we you would

a you. then you Got savings cost do still expect just the even actions? split in between Thank fairly it. these And international out new it, and cost got Americas with

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Your line is open. now

morning, Good Thanks. Hi. guys.

morning. Good

morning. Good

morning. Good

to And congratulations I'll say Vince too.

Thanks.

you growth going a I how if -- could about much saw in you. growth if I business, you big wonder wondered it declining additives business the a to quarter it's if thought was I declining for it's talk bit little the be or and by?

the enough far year, for would be in perspective. We for driving area that, a we in as of revenue we to the I business catalyst think would that us tell you business. necessarily additive invest out to long-term from continuing did quarter. would you it drive It's see call will tell a go not the from probably we're in this material in we're not to that I business successful if even growth but the us, the as what

a based have continue to in technology the from we're the We've additive We and a technologies. had about wire that been published implementing perspective. articles of invest recently couple written here that

progressing, the we to expect, have the those and sites its And with parts but paused to and get parts. challenges we our have on you activity would Ohio. and the it's in interaction stay be customers one with pandemic here very place for engineers the associated as us able of to So have them orders is actually has the beyond been manufacture at that until look that in of all important

stopped into early had visitors headquarters March. our we very allowing in here So

and are or why that solution activity exiting slowly some for That's here expect that as latter opening that don't coming QX, the but the of of that to have to here technologies to that expecting impacts in We're in some second up that additive until training talk our of but part not our of continue WebEx centers more solutions I'm as QX. types back world technical with other our the ability X,XXX excited we remarks, customers to we activity points exiting of team's some We'll allow QX. customer around we're the visitors prepared bringing that have can agile had in about until into QX be us individuals be to so business, we're we over those the activity touch about might quarter, and to other be start only those driving. through able we'll to my I and

built Okay, got you and of you didn't where you anything and thinking you but I critical your like sounds just kind any doing have and [indiscernible] you follow chain? have supply wonder own just issues, are might some I have about a think could issues, you It it, chain. inventory, supply didn't if If - parts it. ask supply on,

I any world, around say supply great and will business to play the Well, impact supply chain that manage chain difference I that we found in through had the we can't challenges, and recognize and in but I challenges, material in appreciation had to ways those just professionals our QX.

around in to reengage. as we QX, risks relates However, job, the in global our that as the that to the demand that we did of a issues through and starts start had there we the to continue see as teams economy could called it we've to challenges that we to be that recognize as able the being us just see reopen one of would recognize starts we're to with that that's moving supply global spectacular but forward, managed front out challenges will more improvements there economy chains, and as why be of and we associated activity,

it. got you. Thank Okay,

Welcome.

from the Capital. Thank comes of next [Operator Instructions] Barger KeyBanc question Steve line you. with And our

Your line now is open.

guys. morning, good Hey,

Good morning, Steve.

working It's you, with been retirement. your enjoy good

you. Thank

planning, know early hearing from last follow-up were we your through slowing but versus seeing I'll of we've managing before customers fits how own in structure into cost that? already we're the I automation in the or down, just conversation. thinking the things cycle what terms how been tariffs of what is coronavirus and their team on with forward, terms automation in year going about virus-driven slowdown their given what they're

with to through that, it requirements through challenges automation manufacturing own made completed forward it structural industries those days quite drive and associated with two, the a we that we will really XXXX, of and get XX, continue these QX need the confident automation as be it's how good question frankly, with five, XX, got as we'll a those productivity, the unfortunately, minimize they and but piece going as automation, us the I going innovations next and customers respond and and to moving still I respond I'll think to but next thinking the be and employee also were we structural organizations, within viewed longer-term, those their think said facilities, Steve, associated a we and with too those would still think frankly, improvements back the in discussions seeing you we to we're weeks, in that when to developing discussions, that to challenges but decided especially space, although of quite a challenges automation be favorable automation amplify I issues came in difficult to said but Yes, projects evaluation and four to you, tell to or clarity within the you, customers think and difficult discussions, to we in to discussions, think was customers coming in back start you some the are can from capital and pandemic some for Steve, the see to at business, feel for the organizations many frankly, and just couldn't them made were see and I and to adjustments go to the the those started that, couple over matured need times really the utilize I've to pandemic up, give about business some are reengage and automation about I'll of that that's I finish XX get over and six businesses had I perspective, those they with their think of automation our spending and tell tell what of we pause, much to a had very certainly were longer-term. orders, to. quite the see where exiting associated of back QX back

your point? competitors to all if levels or is appreciate decisions the if, decline, at service share, taking you or I as stumble, XQ around the speed taken say team actions how the feared and Yes, you've next tough as XQ are given or talking market this of the the bad not about class but

glad business. internally within are we many question, as Yes, having conversations commercially-offensive we're as being you I'm because the asked that anything else about

that saw globally migrate manufacture as products. pandemic the started that decided world to we the we we would So, around

we had had So, had manufactured materials, products. raw employees, didn't businesses, we We we essential key hesitate. we

very companies going back, spring healthy, is are levels customers, there these of those inventory Our some start levels is our service inventory and position to be as like and and believe sheet the to stayed opportunity. Electric balance could what to when be their with frankly, and markets our and that's have and prepared miss they've have have I Lincoln competitors service globally been that, to to because an strong, challenges, ability conservative markets do that going quite there very I should strong, that and service be very to market, we're not prepared

available that ready apply in those been to It's Electric. Lincoln of and could reduction a there recovery, to also in that facing we is quicker all respond the I those want why, individuals early customers to Steve, didn't because the prepared QX markets. QX were as activities entered to We we if that in, exiting we to have cost decided

of think a to as of we high the months, measures some will of strong in been pandemic. level they've eight performance, last international which we six business, position, very good migrate performance over in very XX very So, the struggled can performance continue our those the that in months. last and ensure you our maintain and I are with especially levels we to service through will Certainly XX we a level

color. great That's Thanks.

time. I'm this Thank any at not further questions And showing you.

closing the So, this Bruno, Officer Gabe to remarks. Chief Financial call would concludes for like back now today's turn session. I to question-and-answer

of us Thank and strategic progression programs for Thank interest Chris. joining in to your today, actions continued on call much. future. We the look for thank Electric. you, discussing like Lincoln the our everyone and very the I'd to you in forward

today's this and now Thank you Ladies concludes call. you may participating, and disconnect. gentlemen, conference for