NN (NNBR) 2 Nov 222022 Q3 Earnings call transcript

Good morning and welcome to the NN, Inc.

Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jeff Tryka. Please go ahead.

Andrea. you, Thank and everyone joining us. Good thanks morning, for for Jeff Investor contact Tryka, Relations NN, Inc. I'm to like update. I'd you and thank business for attending today's afternoon, the ended press for Yesterday presentation which well a our been supplemental section issued results posted of all financial website. on as release a the Relations XX, September announcing quarter have XXXX, Investor as third we our you of needs press release presentation, a supplemental Co. & copy the may anyone Lambert If the contact or XXX-XXX-XXXX. at

Warren Officer. the Veltman, and on this call Executive Vice will be and presenters Officer; President Our Mike President morning Chief and Senior Felcher, Chief Financial

Before you December in as annual Form XX-K live cautionary today's the the applies I'd section same in we The contained XXXX call, supplemental including report session fiscal language on Exchange filings the release, in conference Factors and begin, language company's and and presentation ask Securities with take today's the note ended the Q&A press XX, statements webcast. well for the year the that Commission. regarding to made comments forward-looking other as Risk of of

today pandemic outside uncertainties, the These in the A defined includes is The cash to coronavirus supplemental are of by presentation. and such many tables topics. certain control. which acquisitions, constraints, presentation be future and the and the are our the presentation subject the the flow, savings, SEC company's conflict final financial in impacts and impact contain with Our risks transition, synergies, measures management performance the of statements used press semiconductor should measures margins, of regarding rates, the tax the foreign automotive regarding Russian-Ukrainian shortage, reconciliation release rates, planned the chip statements also other of of operating as worldwide and the results, supply cash inflation, cost caution non-GAAP and of exchange markets of forward-looking rules. input non-GAAP company's various cost sales, section will condition and chain on contained statements

to Warren the to with provide call, of financial success quarter. the call today's for as of from actions over has and to will segment results agenda which provide outlook has will detailed as session been XXXX update taken the our remarks. then influencing Warren There results. and update Q&A revised business current review will factors a on the based our the prepared discuss of results on third an the open markets be for view the and a a conclusion back Reviewing Mike the well position external before our following NN then business turning our for company

I Warren will the Veltman, call and CEO. this turn At President Warren? over time, to

morning, everyone us and you this thank Good Jeff. morning. for Thanks, joining

that quarter, other of a dive plan. for transition like the personally I the thought review we third right of for into the both regarding to includes deal as it we me very important announced and of first a retirement the the I've news was consideration, at timing planned great decision me the results this given Before NN end management company. of CEO, last transition This and to XXXX. as quarter effective my be for night our discussion would the

on growth CEO, the a electric shareholder as cost operating years improve for and In on and focused placed high-growth to NN structure, we and ultimately will significant success drivers the believe X-plus and I I other the strategy to value. initiatives financial electrical drive served path continued vehicle markets. our company's made progress have be improved these have reposition

a reduction more to structure is create footprint example cost efforts regarding an for efforts Our manufacturing cost rationalizing competitive our of NN.

more annualized see XXXX. X action close When first end creating of EBITDA hope improvement The in to of my footprint of closures of quarter retirement. huge complete to competitive before by taken adjusted the a to growth I finalization million. the be step will our these XXXX expect $XX manufacturing facilities have for to complete, in global and actions our million NN $XX outlook objectives to We a are versus we support

a To address the engaged emphasis and skills with expect that our half Directors residential of markets. is first place. retirement, my XXXX global a The electric new until Board Korn will and commercial and a has individuals organizational vehicle range potential the to announce identify during of successor I candidates, remain Board and with in targeting of electric consulting in firm, I experience is planned my particular role grid Ferry, a to CEO in on

as I will transition. time necessary Additionally, smooth to on that beyond consulting facilitate a a basis remain available

to I announced and to changes, In our create we Vice for for management his Solutions. Solutions with years value planned and for to starting commitment our retirement also and the shareholders John addition several thank retirement, of President Mobile together Power I our have my other partnered many Executive him organization. of Buchan, John

Operations, commercial, a electrical currently XX Solutions serves to team. in and Mobile at John search a Vinkels Operating help within for named President we the new providing Officer each Chief experienced years NN named have experience focus we As of reporting breadth Mobile ensure Buchan. Douglas a Gunars has and John's to Campos be Interim variety to experience business. Interim geographical of Solutions be continuity Douglas of to NN of Operating of leadership almost Vice positions of of X Officer and Chief relevant has roles, on Solutions, successor, Power leaders with operational Solutions. to Gunars within as Power our experience leadership the

operating of the this executives teams through these abilities We in transition. to are guide X confident our

the the NN make I thank remiss thank dedicated We and to NN capabilities. make day. group that customers our a for better honor value to of all thank would such It recognize talented we and has NN. my the I of work work absolute must to with complete colleagues to transformation individuals. demonstrated to each want not incredible the to be I an our in and progress worked continue have not been team. commitment products is want such continue pleasure who all my also the to that and

I all And thank their our support want for NN. shareholders to continued in lastly,

our completed during some our now quarter. Page presentation, key the discussion third quarter. strategic review the Let's X the performance to will team of On turn of initiatives the our we during

key the areas electrical sales We of continue and shaping on the trends the focus markets. to mega our on growth markets, future our including EV efforts centered

these NN's our against we with business goal is quarter, advance efforts XXXX these with in components of from Our markets. Show revenues continue our goal, markets. and new Novi, in associated year-to-date, excess the or of technology EV XX% XX% we make of progress Michigan. in process electrical wins at And to Battery third showcased that generate To the to

the to nearly Expo. audience. to show, more For those suppliers one opportunity shows XX,XXX a This attendees with electric large EV was Tech industry. unfamiliar of and battery might largest of the the trade process to technology, and The dedicated attracted this to a XXX it's show and as you and hybrid components technology vehicle NN showcase advanced than great who be also known our for

our in our been culmination business. our closure significant reduce efforts Power discussed, strategic which cost optimize announced of review the We defense a aerospace footprint initiative. October California, to has the was As Solutions and I our the of of facility previously production and Irvine,

Additionally, we quarter. to of by close efforts sites the continued end X the additional first

that of cost to to of improvements Page the depicting important we will fully substantially will benefit implemented X, the XXXX. Turning it QX company we anticipate end felt be complete and are the expected how summarize by by perform underway

will the financial industries. Taunton Solutions removing business depict Both this X-month aerospace Taunton for and Irvine on product the and defense by impact same the I On Power and slide, the of review for for we the closure facilities business. pro Solutions period. of of these First, primarily manufactured of results facilities the the the the forma Irvine results Power

sales would the adjustments performance $XX.X On Power in a of income a operating improvement in increase million on to will Further, have pro to adjusted in adjusted and of forma been for X-month basis, and our long-term million, These $XX.X business. X-month respectively, product significant line pro forma of with that electrical Irvine business million, and our successful would Taunton $XXX.X EBITDA adjusting targets is on XX% adjusted forma pricing sales strong operating million. $X.X in more closure the Solutions' increases. result of and we cost Pro represent EBITDA our million EBITDA inflationary respectively. $X.X the income which demonstrates recover and

as have the our from our Massachusetts. excluded pro business facility be Attleboro, that medical We in forma to business relocated production carve-out, will

to million from $X of equipment $X approximately expect also costs but in the the million in proceeds facilities for of $X range We these anticipate million. sale closure

income although current Lastly, consistent we tenants terms. expect for obligations, lease with have are will facilities, our rates not we we our approximate believe these as market secured current rental sublease

if to Now they we the X-month million initiatives will XXXX. Mobile Page forma that a of review We facility associated of the our associated $X.X production closures On outsourced improvement our previously were costs on can cost X-month performed where savings you this the a $X beginning cost can with to be annual allocated million cost initiatives $X.X business. impact we for certain facility with turn been The improvement million of savings reduced estimate pro facility to Solutions low-cost million shifting the the $X.X show slide, X, impact internally. completed operations period. associated had $X.X approximately be X-month to or be now million, and at with

experienced EBITDA cost during forma customers. from adjustment recovery on period. the the customer the recovery time pro adjusted joint at proactive by in from adjusted have the than would an our pro sales the increased of Although pro venture. is forma increases of impact impact have $X.X to forma The increase increase the been the the we lag cost effect inflation have Note inflation, additional our time realizing million adjusted a the China on higher time price of we of due EBITDA addressing that EBITDA company's the to at inflationary of X-month

consolidated sales JV results. in our not reported China are Our

a pro Lastly, $XXX,XXX forma production we have costs. for adjustment excessive start-up reflected

and cost are the plans for of to our eliminate sales $XX.X QX and After would expected Solutions' business. reductions these area adjusted expectation Mobile respectively. XX.X% a forma adjustments cost pro underway, action with much pro tracking end closer be for reduction X-month yield EBITDA these million, margin, million We overruns cost improvement are $XXX.X that these This by adjusted EBITDA would team considering this initiatives forma XXXX. to expected

Turning of from summarized the our X, quarter. have some results to we Page third

We adversely expectations. program start our cash with impacted which margins they financial our are the and satisfied not that that results and the and metrics year-over-year increases for show did Mobile had were $X.X of not These facilities. the the flow not defense we Power inflationary meet discussed also Let clearly comments issues. spite a our quarter we cost we my financial expecting, of in by free quarter issues launches for experienced in are the performance surrounding I actions increases did and million. taking several fact saying we me previously third Solutions use operating see these volume sales during was poor aerospace impacted within Solutions improvement,

for up in the $XXX.X X.X% period Sales quarter the were XXXX. million, same from

the and a experienced in and Mobile X% passthrough lower increased primarily unfavorable by XXXX, pricing year-over-year for Our higher compared markets in and within of resulted segment. period foreign sales offset a business Pricing metal the growth increase group pricing partially by Solutions demand Power Solutions in XX% of same precious our exchange revenue to volume, end effects. driven this

of of million environment in has $XX.X $XX maintain our to protection and us strong liquidity, increasing continue level provided a swap interest rates. an We at million

wins. segments, reflects further with On business we long-term The our secured new new third XX% have segment aligned as million. the were leaders; sales third consistent Year-to-date review EV industry we peak our Slide particularly, annualized wins increased longstanding focus of approximately the business of with growth through with share the quarter, long-term X, strategy of new $XX business quarter vision. secured business customer base. supporting note, wins growth aligning wallet through as well and our Of gains on team's component with in the share with electrical our new

wins We the ratio, CapEx. disciplined to continue requiring a million capital year-to-date incremental capital $X.X take requiring maintained low have programs approach to with of a only and

to invest improve to demonstrated expertise and in growth with in business consistent sales with markets electric storage continue resources our initiatives. battery electrical, coverage strategic We are that vehicle in additional our segments

markets deliver XX, in high-growth with aligned teams Turning focused sales to execution Page our business strategy. our from and continued development pipeline expansion to

recent and in have our high facility in also that growth that increased. decreased the Irvine it overall important markets decrease opportunities The the opportunities While following has quarters, closures. the pipeline is reflects canceled to are understand Taunton target

to segments. are The teams in and opportunities expansion by EV generated our committed our remain encouraging we and electrical

are reduction in to end in position to market. We our initiatives several the continue in attributed currently OEMs approach our to each to pursuing and opportunities strengthen can market. selective and decline ICE-dependent programs pursuing pursuits this be by

opportunity market the our on XXXX. sale in once quarter to life are in further business expires related our the We fourth focused presence to medical the of also of noncompete the science the expand

Felcher I more the will in-depth our will who quarter. now a Mike? Mike review financial turn performance it over provide to of for

along million quarter, sales unfavorable reduced quarter in during third which profitability overhead of million. the million. were stock-based is expense by approximately sales the Increased JV These incentive offset million due equated of to year-over-year of Thank The or of favorable volumes and Warren. quarter. drove million, impacts higher $X.X and the and and year compensation $X a Slide XX prior XX.X%, unrecovered net approximately related you, income increase $X.X third from Year-over-year for up improvements reported JV $X highlights million approximately impacted favorably period with financial to absorption. $X to $XX by X.X% the were demand third an also inflation of of mix review versus partially of results XXXX. improved our

continue quarter, to with Slide our Similar at challenges maintained capital as a Turning levels experience higher-than-usual recent chain supply we to the and, to with our quarters, remained XX, result, of have turns. working inventory. X.X prior consistent

on and levels are inventory increased remains initiatives needed inventory above on focused to to reducing stock by lead working them normal While due safety to year-end. we address several levels reduce times, remain

expenditures. Turning provide at capital our XX, a to we look Slide

year. as from growth. fund million the We continue has in investments CapEx to in approach Year-to-date long-term take disciplined we million current support a $XX to to $XX.X decreased XXXX

Moving to use a third of results flow million primarily Slide the a XX, million use to expected. XXXX. $X.X cash compared quarter in free cash working quarter the Free driven flow capital increase in operating $X.X cash was million than by used flow a of and XXXX, of in $X.X was free in lower

We capital QX to receivable agreed a of sales expect working driven receivable and due XXXX to by by the in collection lower accounts in approximately $X $X inventory QX, seasonality. a reduce settlement million to to normal million related reduction initiatives and customer

In litigation during approximately for addition, in we $X.X million incurred costs quarter. cash the severance costs and facility closure

million as expect be payment We the $X the the facility Act, fourth costs make closures. will that CARES these incur deferrals and quarter related we previously approximately FICA to expenditures final discussed in on

terms cash are XXXX. closure outflows additional expected to earlier to to XXXX will and significantly some are was XXXX than items XXXX of sale us this and for these that year, pay for incur will lower agreed we facility by of While be the XXXX million majority the these in cash agreement behind claims per us early outflows settle costs the items in $X.X the regarding breach-of-contract of products in

to at debt quarter was an the turn versus third of of second quarter increase $XXX.X end million, of million. XX. million Please $X.X $XXX.X Slide the Net the XXXX, in

slightly Our of above a We end end and of decrease XXXX. liquidity, quarter of net target. cash XX, at quarter, our had as X.XXx our debt-to-adjusted marginal from September the and of the availability $XX.X stood second ratio the at EBITDA at Xx million the revolver, on X.XXx third including

the at ABL third $XX the quarter, of availability $X end undrawn million was Our by with of million. drawn

will I back to turn that, Warren. it With

broadly Slide market. electrical market On outline surrounding certain trends XX, Mike. the we you, Thank

of transformation significant and continue to view as energy the markets opportunities. equipment electrical rapid We the

adoption to total into billion first and energy the to or of XX%. sustainable invested investments $XX investments exceeding change. signed pressure dollars August sector. for amount XXXX, on of storage alternative XXXX, Act, the continues storage account the persist. energy the increasing Biden regulations increased climate of Government energy corporations generation, accelerate to electric primary for Reduction power of combat grids goals months by of President with X the Inflation Corporate within reached of XXXX's and the power Renewable XX% the XX, sector investments On one

these efforts, and energy climate and change security billion of investment credits funding the allocated part for through tax As bill $XXX in loans.

numerous in the to legislation investment. amount accelerate expect countries of We

On Slide automotive XX, EV in we summarize the certain transition continues trends momentum. market. to to gather The

global continue advance price While see rising vehicle production levels, country's interest rates, supply increasing ongoing energy and elevate to EV state continue governments costs affect to we infrastructure. chain interest to increased from the federal disruptions and and

increased XX,XXX that As Transportation states XX% EV U.S. More bipartisan from a of Department EV package. XX,XXX cover charging U.S. as which recently, a XX approved of of of support total part plans the chargers XXXX, the highway miles had station and infrastructure XXXX. on the all

the said, While for frame uncertain impact EVs the remains to by expansion we the product exciting. the recent and transition recent we supply investments and continue That challenges. sustained believe inevitable, the on time as chain in production ultimate transition EVs across OEMs inflation given encouraging increase opportunity in and remains to remains the path view development and

increased foreign improved also compensation efficiencies lower driven to from of exchange compared series cost lower Solutions. increase will pricing our with we and Solutions unfavorable driven was generated precious by the customer impacted components. expense. Turning partially primarily an electrical period, and in volume, to of X% favorably prior value-added effects. Profitability sales year-over-year. by by variable segment incentive pricing our higher Power higher and performance, was increase gained The mix begin volumes of year metal offset Power Profitability improved passthrough by sales

Irvine proceeding discussed the Taunton closure are facilities on and schedule. earlier, we As our of

was prior by China group increased versus particularly sales volume improved in Solutions XX, demand, primarily increase pricing period. and Brazil. the The increased driven Mobile and XX% year Page On our from

launches start-up partially higher venture trends. $XX.X foreign business year due those favorable decreased delayed by and from profits These prior unrecovered effects Mexico our to positive absorption sales of during were X by the to a Negative impacts volumes in the reported offset the period. and up also million, XX.X% Profitability sales decrease volumes costs. driven overhead New joint partially offset X-month quarter. to was had which The contribution exchange inflation, third ago. improved at China compared

reflect reduced in ahead, to normal we to due of Looking QX business Solutions days. customer our seasonality sales expect Mobile ship number

negotiate and are additional expectation markets, continue opportunities pipeline non-ICE customers, recoveries prioritizing of on our inflationary We with with with strategy. cost consistent the to focused high-growth, long-term

Turning updating to the are for reflect our our changes in last our Page outlook to third XX, since XXXX market quarter results conditions we update. reported and

Our $XX $XXX $XXX million the EBITDA million; of in million of $XX the to range of to full in outlook now year net $XX outflow million. to $X reflects free sales range the million million; XXXX following: range the adjusted in cash

the America Our sales global North regarding reduced OEM is the strength economies. due volume China rates, inventory increased of and outlook to tempered concern due and in in interest to expectation automotive higher

although customer. a Solutions for Additionally, adversely major volume Power interruptions, our supply expectations have chain improved, impacted

improved EBITDA a and been negatively delayed has drive and inefficiencies tools automation machine of Adjusted as impacted expected by to product margin expectations productivity. launch sales and lower of result delivery lower

defense California, and EBITDA site, our to our Irvine, expectations of Additionally, labor did aerospace operating previous not higher declined performance meet where outlook. and $XXX,XXX from adjusted due especially lower labor at volumes, costs customer availability, our business

a compensation incentive Our favorable current impact $X approximately of a in had expectations which million. also reduction resulted in our

free closure is the deferral severance Sciences, Life approximately of factors outlook represent facility which on the FICA discussed driven previously sale total and repayment includes in the costs of $X tax million. flows the Our for cash nonoperating and and cash litigation, by flow

refund interest of due does include note on million that expected flow the increase cash I prior million, is tax Act $XX of our not refund the uncertain would a to of CARES The refund. from our timing. $XX free expected result income

and including IRS representative. congressional through pursuing our We taxpayer advocate an avenues, this are actively refund several

actions close I our improvement XX. remarks, As Page on some my summarized have of we

the Although not have to efforts expectations, our improved financial third path meet believe performance. results NN our did on quarter I our

that Board have will talented Our depth. in targeted our managerial markets strategic we and a is CEO experience recruiting successor have

We which depth continue XXXX. generated a of to of improve $XX and opportunities so robust far our business business pipeline the teams sales has new of in sales we have wins development and million

investing growth. efforts directed are sales we Our are our that and strategy making future markets will in our capital by smart drive by decisions

We significant to of million expected efforts $XX reduction to profitability are cost within are improve million reach by that $XX our complete. once

approximately and $XX in inflation-driven million price on received of cost focused are We recovery increases. increases additional annualized have of XXXX

believe reasons NN path skill and our employees, is on I and of commitment and For our the confident that the in I right these future. am

remarks for turn our That prepared the operator to call the and now back I will concludes questions.

our Markets. Brown [Operator Rob question comes Instructions] Capital Lake And first from of Street

is I question sort $XX last much first kind get? sort guess, there million My think time And come you you and and that to you've it little got, already how of of a said more the flow I is through think, you of can takes know year. to on out is that improvement. you pricing yet much I How negotiated?

I much depends it on we inflation would largely you, honestly. tell Rob, see, how

Mobile pricing have customers Solutions material-related our the As automatic for the indicated, side. anything majority on that's we built call would have increases currently what I in of with we

to goes pricing customers. material-related contracts. of in On adjust the to costs long-term Pricing significant don't it precious our metals because a resins through we've negotiation increases. proactively that we require And significant it We've that have seen the shipment. doesn't side, seen cases, we've passed and those and for amount relates up of Power day down on we as and

side electrical we have pricing. move pass as demonstrated opportunity prices the ability have remarks, and, my on I the that So to through indicated as there, the in

X% pursuing our the hate side, that increases from tell material would another that nonmaterial-related -- there's nonmaterial-related customers another probably, speculate cost with automatic. probably the products, the applications you is there's relates have On to to I it we're really probably we on associated but Mobile I XX% today. to there's as

takes a won then can years good But activity is into wins next that over projects? moving project turn couple then you to adding few How of revenue. I I presume pretty what's guess. to sort Do of the that you of the And see those terms revenue kind in continuing in quarter, get activity, years? the building? that cadence sort you've And EV that had into great. base pipeline of of it Okay,

I would tell priority you, for I obviously, us, a as it's indicated.

team Our very that. heavily is on focused

interesting One of of development comments of the But when the for referenced this relates storage-related for that it in relates Battery that my batteries that things it. utilization on and the I to was establishing factories. me was a number needs there's that those as in to attended Show I it lot there reside of to factories still is research a today lot development the continent as vehicles by to done only be manufacturing grid, customers their certainly not that for but batteries surrounding

activity same customers. that. forward few So types are that moving seeing connected had with side of on with EV we're news for We're installations. a a with the the the that those quoting is multiple of We've product quoting quite good instances people we're where lot some

in right in So as there the that those the developing is types of our United I engaged States. in instances. the some teams actively is are at a this think of pipeline this and certainly, But little forefront of duplication we're

Okay.

I kind much if year at next the do in in you of know you've And of some of but do visibility that what's there's do And comments what changes year. you And this past? the of uncertainty maybe Okay, range volume of manage through experienced next have? of guess, down? outcomes you great. sort things for your just macro around kind kind point? slow have environment I then, sort how the into How visibility

the good X question. of especially I for a part. through with bounce, And what did is looking would I on more the a tell our auto their I that seeing were the we're outlook fourth we XXXX. cautiousness little bit a more little on of side, when customer think think release in some bit we schedules quarter Look, you ago, months that and

OEMs inventory You saw that the for levels up. jumped

average, on we previously, low it in XXs. was I the when talking think, were

XX-day, it's range. Now the XX-day at

some was actually they the I they Ford, up and seeing. They were data think, XX back historically. announced towards range, the where a higher of more when that have in bit we're getting little been

think So, ability going to of that certain is our of we it's in some relates a our move is result tell the a that that majority seen to interest significantly interruptions least been we've lower in that. the it amount that there's impacted going down because think seeing, us chip to today, so And shortages the I we're expectation product we simply rates. The half where as and what this are at of higher levels releases. at would we've be semiconductor result as from of far chain cautiousness for don't the operating you XXXX of a first on which supply of I year.

a that. I that demonstrated capable strong positioned that that team well our proven flex, And the and to XXXX on have can certainly, I a side. think side we've we So, as the very diversified ability management think it relates NN is electrical do to with and that we throughout that portfolio automotive

The facilities work of our majority week. XX-hour run a

is XX% flex of on like the labor would part without machinists is there or So skilled back a side event that in we engineers we to what retain losing can downturn. a the any which key

The KeyBanc from Steve Markets. Capital next comes question Barger of

on Jacob [ph] Steve. This is for

than double-digit a into trends the into for maybe pretty lower talking last the that half little what in see So were be moving you about levels one, to you implies QX, bit growth of the that quarter, 'XX? organic specifically? levels just quarter. how those decent And Can we first seemed maybe the just then about first heading momentum talk

through covers expect year I went quarter. the we through, how we the think that honestly, the think that I fourth build kind gave for of Well, to that guidance whole we

bit. market that today. So we're view in do guidance our will jump to just businesses some to is back doubt We're time. inventory as robust I our whether point report year-end certainly they not and adjustment seen for lower they results. some as it we seeing levels not little inventories have get I going giving that able time We'll and They're cautiousness run a We've think been volumes. to as customers' OEMs on there as given at relates this on the on is pre-COVID there's period their the maintain XXXX. of But how a indicated, level certainly some in our when were that that

in that will expectation improvement sales continue see to our we XXXX. is So throughout

to little quarter As the it relates like the post-election. and bit goes, to see a we'd develop things think here where fourth see especially the degree, over economy I

Okay. there. some That's Got good it. color

of kind around maybe lot some the negotiations Do end wait know first your you twice a to the we're I contract rest the on start a only just through? majority of to one, of think year, cost going recoveries of coming of those centered a follow-up year. have recovery quarter Second side. seeing until are to

we're Most January of right our now X. adjustments on talking to what about to customers relates pricing

there. Okay, understood

X Just more maybe me. X or for

market, curious but market. the reentry medical about talk specifically the just Specifically kind next business the Sciences Life areas targeting until in I'm of the of from what into your market, I you know on year medical you're the noncompete October medical

I the space has. targeting areas get time, agreement. that not processes to any subject are medical in you we that noncompete would NN we're now the there we're fit to applications that still a point because tell right core Well, that within when

anything grinding that we have would turning our play clearly be to a have. or focused was that And set in we would skill very the into business obviously, today that small medical So grandfathered stamping or precision noncompete. on

customer into capabilities instrument manufacturing, expand relates relationships. have the that could And some we we there as it other of to

Understood. could be of of Okay. this noncompete sense maybe I opportunity magnitude into the mean, up? you you do any back what of I have guess that sort it as get is once

period of a it's over could million that business triple period business, of a time size of Look, us time, period could a quadruple or we it, today. would time or I think over $XX think. into the X- -- we're that Certainly, a once X-year for of in we we

markets your prepared remarks, just is your of quick XX%-plus sort about one In right 'XX. percentage you mega revenues just Okay, now. And of getting beginning from talked got business trend those one. that curious to maybe it. what of by then I'm of your last the

Mike? like, at, think? are we XX%? Where at, or I XX% We're XX%,

think, or where think XX% it's at. is I I we're XX%,

but So internally, about aspect it objective. period, our it's it's that's is our right? setting but And not that. we've growth And external stated stated target. So XX% that with conversations they higher than growth are the had the Certainly, to throughout sales getting it. goals of the

Kerr question The comes of from Investment next Tom Research. Zacks

X and answered. quarter. of ones. most current like think questions situation? I into of that? couple asked A on the Any been Any hope month have anything quick inflation commentary of You're or my the signs fourth

to are signs customers. adjustments the of Well, continue hope we that I think secure our from pricing

the Power indicated, done As that. continue on Solutions we'll that we've side I and to do

We have lower side, the are seen prices. the metal on process by Power sales impacted

certainly change say my margins changes seen dollar, our feeling silver about little lot standpoint, would that a significantly tell we've talking can margin. you the is It margin, sales. the I doesn't conversations percentage quarter-over-quarter customers. but have necessarily we come I'd down with today So that, a a But right? of I'm impact And comparison And bit. from

deal little that because were reach have important more maybe think a we they conversation I early recently, supplier on, I an OEMs they because the more they're think to dealing to some the the have us. a some than on that working, they of now in supplying our path reasonable think and they been I in talk is because same product. customers approach their of with And they've now have some concerns. already with a the sort have how that healthy And them us And clearer adversarial they had issues, agreement an want it's with of they bit pricing-related opportunity understand that and

right. All

China Any kind to additional good. back you on that Sounds normal? color of JV? like expected? recovered Is the Or

with COVID. I quarter. China a Look, operations $XX we're we're that hard, would That's a you pretty But had with a second a well jamming there. over million still for in the $XXX run bump rate. an about tell issue little quarter we million in concerned there the really volume Obviously, our

well, reasonably performing is as WOFE Our well.

this feel on our time. China what's pretty at point operations about in good in So going we

arrangement with to end customer one that was the I us a JV. but them. some the year. agreed the to first are we September for negotiating pricing It We on didn't is for unfortunate that we negative with pricing think it still we a on conclude for the prior concluded of of adjustment an half the

and in year. concluded the half then fourth pick the didn't with an get that that And But quarter. customer on we second of third up in we've we'll the negotiations but quarter the October the already the started on book opportunity we in it to

to So lag as relates in the talking inflationary a it arena a little pricing matters. about for of bit China

it. Got

Okay. A ones. couple of quick

about talked still quarter, I'm being happen? that that's year-end. a Or not still under assuming I Xx leverage think can ratio last goal? the at you

focused obviously it below on getting Xx. We're

revised I in to outlook, think, early that's than this at point. more given the at be probably going year-end XXXX

talked one, next you or a that Can normalized you a last not adjusted on EBITDA but the And consider goal Okay. quarter guidance about did giving how you're basis? forward guys forma you expectation XXXX segment until pro going give margins.

million other we the in But to sublease estimate $XX When better million X/X through XX% continued view the and closure is to timing March, various It's of regarding we'd impact outlined be and realize 'XX. work the our to as obviously we going we realize million we'd on outlined, we about that of that to a and that factors. sequentially There's for some of the terms have $XX on our those about closure current get So $XX we'll XXXX. facility savings, XXXX able in current versus $XX that. is of transfer. XXXX view provide our that million the facilities depend in that outlook

session. This conference closing back any like turn I our remarks. for the concludes Warren would to question-and-answer over to Veltman

our indicated beginning, taking all from I support and in today call day. our to Thank today. this appreciate had well a of as just participating the Have that you. as Certainly, shareholders call part the we've our for at in you the we analysts as I want good employees. thank stakeholders and appreciate

The has today's for now may attending presentation you concluded. disconnect. conference you Thank now and