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UFI UNIFI

Participants
A.J. Eaker VP Finance and IR
Al Carey Executive Chairman
Tom Caudle President and COO
Chris Smosna Vice President, Treasurer and Interim Chief Financial Officer.
Chris McGinnis Sidoti & Co
Daniel Moore CJS Securities
Marco Rodriguez Stonegate Capital
Call transcript
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Operator

Good morning, everyone. Welcome to Unifi's Third Quarter Conference Call. Leading today's call is A.J. Eaker, Vice President, Finance and Investor Relations. A.J.?

A.J. Eaker

good and operator, you, morning, everyone. Thank

call Operating Officer, the Vice Treasurer Financial today and is Chief and President, Officer. Chief Interim President Caudle, and Al Smosna, Tom Chris On Carey, Chairman Executive

securities materially statements be will are at certain statements today's about call Management or call forecast guarantees included found by Unifi statements based difficult laws. results on estimates link. these management call, advises from by involve and the the this and/or referencing webcast meaning implied that can differ unifi.com Actual quarter presentation not that third risks current the operates. these forward-looking what the projections expectations, in you predict. that is of are and will and within a of to clicking Management which expressed, be markets performance statements. be that conference federal cautions statements are During future in outcomes These may certain

schedules with Unifi's advised that to I reconciliations over be adjusted financial call, that results. the be the non-GAAP please You regarding this and such as capital Also, measures, may impact SEC factors Forms in the disclosures certain are Caudle. various can Tom XX-K to XX-Q to will presentation. these directed the filed on EBITDA, be may discussed webcast now and turn found call and working adjusted on non-GAAP the

Tom Caudle

joining our including first elevated morning us the that Thanks, quarter, low-priced In fiscal saw challenges thank of in all continued disappointing. for difficult thanks and North material In of American costs week but was nylon XXXX, today. and additional bottom growth saw polyester against to we our Big A.J. Good half operations reporting segments, in core many to our picture. our of performance sales businesses. shipping environment, same an line execution raw this imports, the everyone, you and our three we we part third in high-volume, shortfalls across fight during

that million we're fiscal growth in made translation, core shortly understanding key net We deliver to impact portfolio that results few for let's proven I'd strategic compared taken opportunity a the our controlling increased demonstrate on $XXX.X said, our for or innovate decisions and our transition million detail core go provides like I costs and excited future our million realignment strategy a strategy containments Central and and hit quarter global partner the action Chairman, taking These and of review positioned North remain more sustainable Executive and need will our we $XXX Carey, to drivers quarter additional America. and forward and line, steps service swift build our products. will to a forward, remain we but being continued superior our more our structure position. to agile on We the leaner, are the moving have establish our having helped structure cost third excellence have shore recognize into indicators foreign currency the the quarter. bottom the the product that have solidifying of customers PVA XX.X%. strategy, organizational for underlying Both business. new well believe for I changed, for the on That market the growth. we capitalize focus a about third performance believe of of roots and for of When reiterate profitable business renewed us focused but our on Revenue sales a path and to more Al business due strong. XXXX. up to $XX.X excluding to significant business in to we our right craft we deep first remain hasn't to operational

operations the foreign began, to brand the competitors duties the segment especially platform, experience bolstered that petitions impose of will by in from issues countervailing shutdown our we to cost certain line while on differentiates made it yarn also the continues sales results. volumes. these of impacted pressures in U.S. driven entering Profitability top and levels and strategy. elevated certain again, U.S. in the of market our depressing in the a trade primarily that experienced imports was to publication impacted government raw which This line America. anti-dumping International we Shortly Much that, of and growth U.S., us was bottom REPREVE difficult and by quarter our polyester-textured yarns, week go-forward which view growths markets. pressure from filed significant remain material paramount after temporary Asia sustainable Despite our one growth be Third our we our in data. short-term were the imported the American import our extra our North shipping by delayed see and yarn North to hindered

since effectively. have and we levels period, against pricing sacrifice some and domestic pressures the these growth, from were teams headwinds, our our share. forced major market China import to remain compete been drive further to amplified learned have adding but to We that top worked Against competitive margin time during line that

quarter at a began the Looking down seen second expecting costs, the higher material quarter. third raw we from levels polyester during take the

material raw during the costs flat third remained polyester quarter. However,

was step these of occur. anticipated February not did costs our stabilization actually a While guidance that down welcomed,

as of cost Given America. pressures, these align taking action the with we external in are realities exists and have North our particularly marketplace it currently better to

run therefore, the We environment. took first pace That and against $XX administrative run for to around and decrease XXXX a current run much continuing action, of to rate the rate was a across continue for were rate across and commercial annual aggressive fiscal we our general remains plan, REPREVE our is and targets product significant execute $XX forward. moving reductions enter fiscal the especially just lost advance of which our on globe. reduction the an our done SG&A cost-reduction million. work portfolio we of The time which the growth preserving driving These with expenses. grow cutting this focused are we strategically, XXXX. capabilities to for but cost roughly by First, XX% are we've too made ability key includes million half operating of on for to

improved agility support increase to required flowing manufacturing increased plants our to Next, our efficiency mix we complex the edge product absorption on in through providing that polyester is the core and of a focused measures remain drive volume textile on cost critical to pull-through. order at handle volume remain Increasing assets assets our fixed and of the and leading to utilization innovation.

our the at major of approach time, functional the to including optimizing are same targeting improvement. while in optimization efficient solutions more chain manufacturing, deliver With of to better sales restoring America's cost We a and business, cost technology savings lower expenses, potentially take areas, process our meet balanced the and to across procurement, we supply also structure customers. demands core and effective can

action place in have right challenges our believe and have So the we better the are to in business to conclude, we taking aggressive plagued that and handle structure got few the and last have quarters. decisive

bright level Europe. REPREVE high was XXXX sales programs, primarily growth chip combined sales Quarter walk spot Quarter sales a Asia XXXX. and of The line top by and through driven in X was X, staple strong. while with International across versus of overview let's a notable growth, Now filament fiber performance remained

polyester American additional material In However, markets, North to the higher translation partially currency dyed saw offset in and an both XXXX due week, revenue the raw expansion costs. shipping selling impact. International sales and acquisition the volume, was completed by to May tied Central we in foreign increase unfavorable and prices primarily

due pressure of major imports increase the polyester increase polyester, raw cost a increases, materials prices the selling profitability addition lines, textile revenue volumes, experienced to on material-related week placed product in in our significant the to applications. the and nylon shipping U.S. raw following for nylon yarn additional a pricing in global However, particularly primarily Like for

affiliates benefited in of that of the sales past, However, successful third the the implementation from Outside in consistent increases raw filed the in we of leverage. I'd material on like by a a operating environment purchases to timing core discussed favorable quick inventory category price equity petitions provide decline led muted XXXX. incremental our our and profitability now update comparably that cost operations, performance. and trade better have the October quarter. a Parkdale selling with the by Nylon provided we status

filed we China discussed, stockpile that our these previously and preliminary a India due imported X, We imports in a this duties believe polyester-textured of countervailing imposed. the this were and relay just In China. circumstances on filing, duties Accordingly, filed, XXXX. were textile to we material imports efforts imports XX% Indian asked months on after surge from XX days Department duties China announced date for duties are granted these the imports. apply announced. a and on from affected and imports preliminary China. recently Chinese this will preceding commerce to apply that countries department The In to industry. allegation yarn causing U.S. are request was also there XX spike petitions injury of These from retroactive duties during before yarn to from April Commerce the in subsidized future As were April for the of and imports retroactively critical was dumped petitions import from to

anti-dumping duties preliminary June date and be will days effective in the imports the preceding those expect also XX from announcement XXXX, We of announcement. during retroactively China an duties for of

these announcements, the Following throughout continue of will process investigation calendar XXXX. much preliminary

by recent confident of to measures this quarter but stabilize always determinations position we our Unifi's as final expect with, calendar our help a cost initiatives in the long-term leader that specific XXXX. We highly market. subsidization of and will made are to reduction competitive injury and deal will end be dumping, There to issues us be

are Instead management team, we for our I our add searching provide actively right the Chris executive the on this financial from permanent our not interim call our skills mix due our Apart Chris? we are CFO, In and of experience in course. to believe now terms existing more we'll pass to provides we that detail on executive an seeking go to Smosna of team execute and full to search, to into strategy. update will team. CFO, our currently a results.

Chris Smosna

Thank you, Tom. good And everyone. morning,

taking of the we meaningful my you the and this see level results Slide but into Tom our net begin a performance today costs to where I three presentation, disappointing, and are across income. of on overview As noted will business. action webcast high of will the discussion drivers are dive have reduce in period can

to from third the in Moving quarter declined third fiscal million right, $X.X XXXX the a fiscal $X.X of of net from quarter million left of income in to net loss XXXX.

the this by of in the For this a change sales and rate to shipping in the the applied number tax presented third effective timing Asia. described in explain XXXX Tom material in as of XX% which items down relevance additional separately notably fact, of noted quarter we've of the moments. impact net period significant continued A week favorable having was a on of along will by to the driven in our due a tax the shut our analysis holiday to earlier, the PVA growth increase fiscal rate, bridge, I product increase shipping few mostly the impact the with of days sales

our to gross across the level discuss our unable business following on we pressures hoped the meaningful a slide. margins, of achieve. are bridge units decrease However, and experienced profit have the margin we in that we maintain the I'll drove to that gross

joint on offset unfavorable to saw reducing and along rate. foreign expenses earnings, on improved after-tax affiliate with $XXX,XXX expenses primarily recently and by for improved net an Parkdale margin conversion from with nylon leverage executive approximately significant Stronger reflects equity basis. an earnings environment This the operating forfeitures after-tax income for changes. Parkdale. $X.X departures approximately This of improvement decrease bonus more operating announced currency basis. decreased The with and was along a primarily were connection an operating equity of provided an affiliates in in our Next, million we due tax benefits benefit by compensation to equity ventures improved

to a Let moment explain. me take

to the foreign effective earnings tax certain taxed earnings earned the at inability First, specific domestic our of advantage on general our had unfavorable U.S. mix overseas, in an created an of higher income tax rate. decline impact rates. credit unfavorable taxation This, of with take combined offsetting

tax third the impacted effective expense reform. the related the unfavorably to lower quarter, in was pretax recognized by the nonrecurring rate. adjustments our significantly of quarter third U.S. to tax amount Second, income enactment of the tax impacted Due

rate. the our domestic effective potential Looking forward, increase tax has to earnings meaningfully our improve in

provide will updates the tax additional We in future.

restoring we Beyond profitability. the with the headwinds that was pleased of focused on are are quarter a are P&L, full it squarely taking, steps which we the tax rate, throughout but future

to four. Moving Slide

and for We compared of third driven impacted yarn have for the for of product provided The portfolio from a The by Consolidated cost the margin lower to in weaker margin. third fixed-cost and quarter lower pressures and adversely gross gross sales was the our XX% primarily fiscal X.X% by contributed mix margin across to a into a fixed mix. sales was decrease was imports bridge quarter XXXX. weaker XXXX polyester U.S., segment pressures absorption fiscal gross contributing competitive competitive to absorption.

foreign Sales million and for seen Total pressure prices the to mentioned pricing to $X.X shows up us the adversely and allowed to connection in continued the products. The our segment approximately the in third quarter able our import segment a for pressures, of were nylon strategy overall nylon material anticipate and softness in quarter. prices validated. the position data we profit or continues effectively combined in margin, restrengthen in five quarter. nylon The dramatic earlier. brand International protect growth an profile. million leading nearly comparison petitions causing pre-products Sales products. X.X% the third in of net of significant XXXX. market. raise in results in the highlights of importance from selling exchange and to portfolio sales International recycled be landscape. position, Slide cost lower-priced raw While raw remains segment the a the dynamics and continue driving reaffirmed were successfully fiscal after sales $XX segment in by underperformance certain to segments, gross strong efforts third impacted spot a generate global benefited were gross in market International to with portfolio that in way raw to we segment costs, quality which decline market competitive to The competitive quickly attract of programs Tom a as the We material pressures be trade pressure increase These certain margin market increase to our up continued bright XX%, despite Asia PVA maintained material the led as a was

softness in both Brazilian However, unfavorable foreign translation currency negatively this market. was by growth impacted our and

and raw benefited incremental week, Our our XXXX from polyester shipping segment the additional sales from material-related price acquisition. dyed increases

of impacted Chinese ongoing but our Nylon U.S. ability sales of yarn nylon the shipping impact this for reflect commercial surge X.X% raw products. imports competition week in in yarn the additional pricing discussed market also offset by The with the decline previously pleased pricing, are up higher related manage segment. difficult, an remain cost-based partially the significant overall demand we up material were placed revenues sales the However, our our and and and Overall, efforts our into pressure textured on portfolio X.X%. were negatively polyester and and mix. to

slide. at compared performance, XXXX. total margins gross items came for QX XXXX XX% the X.X% gross for covered previous company For on QX significant the in Overall, we margin to

impacted Looking was at that a fixed-cost earlier. this mix pressures the and lower segment see from from polyester by weaker we perspective, sales competitive absorption resulting primarily described

a pricing margin margin in and quarter. Nylon X.X%. As responsive accretive X.X% actions was fell the gross third result, benefited from to to gross polyester from

third of than had approximately from of the X.X% comparing quarter to weaker to along profit material negative impact translation, International doubled gross mix currency more $X the when margins result, pressures slightly million a raw QX to considerable with in cost XXXX. fiscal a the of the from a XXXX. to And As which effect addition X% faced pressure sales compared segment

earnings step XX.X%. seven $X.X as margin Net in primarily a material covers debt revolver that was $XXX of benefited approximately million, remind above environment, $X.X from availability higher period and Working remained six Distributions at totaled capital As stocks. driven million XXXX inventory million. amended raw ended million. you ventures points. shows and million. in We $XXX debt quarter highlights. while liquidity XXXX, principal. better XX XX.X%, leverage. maturity million. I'll a was above adjusted a sales Slide working million operating amount generated while Parkdale's percentage to joint was is year-to-date million credit leverage December basis able down the capital Pretax equity $XX operating working we the interest at were expand we Adjusted $XX in remained average declined to Slide result, balance capital the reflect the affiliates. by was the an better to and sheet increased results the and nylon while comparably pricing and favorable facility more and of $XXX $XXX,XXX, in $XXX total date

fixed was principal. in million of have at repurchases. $XX effectively our Additionally, on million using At announcement, with $XX October XXXX Consistent approximately rate available weighted X.X% XXXX, X.X%. share that swaps remains XXXX, we May for terminate debt interest our average LIBOR our March

leaving financial an eight. update shown to Before Slide fiscal on on I discussion, outlook the would provide like XXXX our

net $XX and to reach. profitability yarn sales execution performance We considerable in is come recent growing of mid-single progress out short. With this the line growth third the And bottom and our expenditures. track experienced up remain shortfalls into guidance capital for and percentage have current revenues on Therefore, year. allocate while remain digit performance from headwinds pressures competitive our U.S., to solid, quarter million the imports we approximately achieve in has range

taken expected is operating and effective in result to adjusted fourth And to the XX% million. estimated million income April are and in rate currently is $XX XXXX range. range. the million, tax $XX $X total underperformance P&L, unfavorable $XX cost-reduction XX% the Our EBITDA $XX a lastly, now reach to specific of quarter rate to to and drive expected charge $X an actions tax between range million severance in the is in expected cash-based million to to Fiscal to million

Now the call like to to turn Q&A. opening briefly Al for before I'd over up Carey

Al Carey

short in I the Chairman a to to in take what seen been of moment the time Chris. Executive part I’ve position. wanted organization Unifi Thanks, I’ve discuss the that

several sequential board, right our to now to in and the allow several performance expect business to and moves recognized in important have changes us direction, be needed been made, those made see that we quarters. a our upcoming a moving the As changes will we that improvement in get

several we've as assignments, our be should for very and the I new which good streamlined organization morale the executive management The is First, made structure, performance believe, and simpler. of for new well.

We Caudle, who on decades. several Tom us over track. veteran have good Unifi have He tremendous confidence team know-how a and our performance the is put in seasoned to

taken for a us. overall Second, in our give give think on exciting And then is in this important for company priorities, is organization our us I and which performance, that SG&A, and will company P&L driving business new us SG&A think REPREVE our business, heights is extremely finally, more we both to for the important going driving the and appropriate-sized some now required reductions of flexibility cost mostly also be are. to priority focused and important both a core our have innovation we size on I

with in come. we're the that and EPS see say we're We're optimistic changes, I'd a gradual So months improvement to in income, these EBITDA to operating our optimistic. going that

the like to I'd over for questions. turn So to now up open to operator this it

Operator

comes first the And line & Chris McGinnis from our question of instructions] Thank Co. with you. Sidoti [Operator

Chris McGinnis

questions. for Good morning. taking my Thanks

Tom Caudle

morning, Good Chris.

Chris McGinnis

year? maybe released the a to It's the do And through, Will once implied, you trade something given start now? prices? language just off and we be when expect and they petitions. competitive talk little later that start can then into how are those about on bit can with the move versus you timing And maybe retroactive Or come are those duties UFI today? in just there you the to that if is

Tom Caudle

we included that Based Department a October XXth possibly case country. this into experienced we've significant on the duty ones did duty the ruled were into countervailing that levels Chinese XXXX. or which not in very was our until U.S., The ruling June. suppliers. the well. week, critical time, in those of the rates, were They coming are And and or and since of gave the place not of on filed the most out of rates the petition and the cooperate imports as the increased came countervailing rates they India effective on Commerce. increase some XX% depending the some we positive ruling of XXX%. between Also, China filed of comply in on substantial. anti-dumping high producers, which was XX%, take on imports Chris, original then ruling, were end will The the on a on duties circumstance And the X% also ultimate by exceeding of India coming somewhere on very,

feel on the know will will from impact they won't XX imports impact also preliminary compete that we but And rulings. field like to impact, the on So with do for those going days be exact we a ability a our more forward. retroactive positive those level-playing have

Chris McGinnis

Right.

back of go that'll January? end So the into

Tom Caudle

correct. That's

Chris McGinnis

recent, the I data favor it's latest know change or there that your in in the Okay. coming from More has it's really… imports been in the have? rate of any you but obviously

Tom Caudle

imports? the of part as mean You

Chris McGinnis

Yes.

Tom Caudle

anticipate It's bigger forward. have going too quarter. going our We don't would and a then the tell. XXXX of lot expect a fourth early fiscal We to into impact influence to in

Chris McGinnis

queue. I'll and very But REPREVE year just PVA growth about can That's quickly over helpful. And the year-over-year Thanks. then then you year? question the back maybe last jump in and talked one of also

Tom Caudle

about XX%. We categories a forth. set was that at normally PVA don't year-to-date three, still in numbers track growth the our are goals then quarter REPREVE about of And percent we on growth XX%. PVA talk our as achieving but of about The we've sales, were portfolio specifically, those

Chris McGinnis

luck back queue. Okay. Thanks jump I’ll QX. much. Good in very in

Tom Caudle

you, Thank Chris.

Operator

Securities. question comes And you. the Moore our with next line Thank from of CJS Daniel

now. is line Your

Daniel Moore

morning. the for Appreciate taking Good questions.

Tom Caudle

Good morning, Daniel.

Daniel Moore

XXX side, the the impact specifically pressures, point debt FX the margins. maybe minus, international or that a focused margins, was gross the I on Tom, basis bridge plus wanted with or to Understand the to you. understand on going help kind down be drill the obviously, international us you gross but as rest -- on get so, out of where XXXX? with expect help to some Thank central start -- us extent, import it's what's importing into delta. America, the do and North we impacting margins but fiscal of understand and those I

Tom Caudle

Dan, the the the I'll further have go And business, question if in let I appreciate question. into Chris we'll details. jump a then about you after he finishes.

Chris Smosna

Hey, XXX Chris. lower margin, declined XX.X%. International Dan, from two-thirds XX.X% about is was this that margins say material pressure. about I'd driven basis raw to conversion by points of cost from primarily

on Specifically, by the inventory pressures spike October costs lower previous from The impacted the weaker calls, we've remaining about came as that the price portfolio one-third sales up a primarily mix come and competitive pressures well. portions that impacted we've the against. costs were and of spoken moderately competitive

material sourcing with continue sales, we'll on work growth our continue volume do and costs filament strong see Asia in our we efforts. to and raw So improving to management cost

the that's margins. segment So for international

Daniel Moore

Okay. higher And a Obviously, material period through of a it's on us increases. pass raw been maybe to time. price ability sustained long for update march

take to you frame price over you So if of a increases? and relief? through harder little do those get but what it'll catch think little you still up, some don't time are back get input it a longer putting to cost makes And

Tom Caudle

end this -- pricing, that with very the raw place. taken all if in We've quarter And the increase raw pretty even will are we and of But increases, good October, of lag seeing we it ball. although, scenario moving effect just material our when raw eight the today, involved behind has forward. are range going lag like where decline. we three, been had effect. we've a stabilize are -- they a a in we been the place into we material is feel November the as a steep business of way feel there And that in price had continual with as material like effect Dan, you've

Daniel Moore

approach or color you that then taking the to savings initiatives, all? Got maybe gears G&A major for offsets savings? and it. and that at other that reduction? shifting there. talk different offset any buckets there And investments might thank are as cost a of you to the Are the reduction And that marketing are you relates Can quantification planned or it about some cost of areas to

Chris Smosna

spoke Dan, And is first for as run reduction about again. the we Hey when the on half Chris are a the fiscal you call, normalize that was XX% rate about Yes, items. this $XX certain targeting of XXXX we SG&A million for on XXXX. the of primarily process million began we by And two rate executives, with departure time that QX, compensation share-based run of which recently $XX forfeitures announced to the enter and fiscal of variable-based really March in the our the benefited due compensation.

So one it. of piece that was

that cutting we're non-critical to took work administrative which workforce QX, and continuing place on those types and certain fees, professional reduction consulting small our expenses, etc., in a made T&E, also was items. -- of general We fees, to

structure, ability and customers lead But to grow leaner we position marketing make bottom to our believe a being to and where we not expense will be. this future line. benefit careful inhibit to service our us the for which all So they will agile sure our need better and that are our or efforts more are

Tom Caudle

share of business, And certainly competing regional to to our we our mean, regional -- I base our strategy trying on to innovate on going be assets. our will going gain improve are partner, leverage are to and that. add which more aggressive on strategy. build our cost and would continue I Dan, We

we going up our Our to there PVA let efforts and although so marketing either. spend, and we're innovation efforts we're we've reduced are our to not paramount success to let not forward, not going on going our -- up are

a we're So were and the appropriate in forward outspending we've to to I more competitive could and mean, environment. taken afford, we action ready competitive, we what be just move

Daniel Moore

the it impact then how And would trying feel imports, of if that it's primarily at like? margins, in is and to to pressure of on we North I'll Helpful. to may. a the put the -- given American obviously, of look margin? look to quarter March your what the import get one a I and relates And If But could that level and challenging. in range quantify polyester, decline possible much guestimate more, relates for the question, -- relief of spikes you speak impact or it's the piggybacking just last ultimately

Tom Caudle

very even not I the preliminary making ruling has I regard. Dan, premature come in that yet. the guestimates file mean, would down be on for think you to our anti-dumpings

to much forward. some would rather making see going I any projections So wait and results we once see

Daniel Moore

it. I more, do queue. jump you. Got in I of but would have couple back Thank

Tom Caudle

Thank Dan. you,

Operator

Thank from Marco comes of with next Rodriguez our And Stonegate Capital. the you. line question

Your open. line is now

Marco Rodriguez

you Good Thank questions. taking morning. my for

Tom Caudle

Marco. morning, Good

Marco Rodriguez

Hey, management little bit the here. I you could on a wondering if structure was more talk

You not talking like looking more It having structure. sounds about meaner, a agile a guys CFO, you're a CEO. new but for are leaner, new

of other mid-level If kind the you about of it follow savings. bit like prior Were the behind and the rank with all was XX% management down and up then file there just to individuals that; cost little it want thought also helped just kind Or on can plans changes? just the talk additional process sounded that reduction the of kind a on question

Tom Caudle

-- will I Marco,

Al Carey

take ahead, Marco, is I'll Hey, Tom. the first. this -- go

Tom Caudle

first Yes. I'll part the defer going answer you to to the question was I to of say anyway.

Al Carey

Okay.

This the calls, So Al. hear to is nice on time first from is you. Marco, this my

executive take think that for opportunity of opportunity are. players the some have I SG&A, opportunity pay was core have and real good business. the not you size tell understanding think out management out I just also long-range other we the team. words, a was there was and that the base the business, then think us, given a to more I would REPREVE company high-level a a I So business, In the the of balance there that few an to

So feel think I that an we've approach, I into and and very the place with of several had the did like out executives next meeting put board in job exceptional just in positions. young balanced laying future some that just I have the quarters. a yesterday, we I'm promoted impressed of and they

as it far close. we're probably CEO to the continue that. off. getting put on put I on and think hold going CFO search, we're search, as We're to the going And that

at from we before, I but Tom, still tomorrow I for think in head role North and was on retired that. my the I've now as -- myself in that was PepsiCo, the board the can I officially run between America business but

have So middle, the at time feel top of spend this is not But the say business. in into it's how the a a great say to deep pruning I and I'd then mostly just big for I've cut on deal we're going. I'd an But organization. level optimistic

Marco Rodriguez

you was talk about for the aspects that improvements if What apologize of specifics you sort And Got chain you supply improve can and bit the utilization asset same sort in Any a there actual the also to be this. for that the little missed make? and I kind can company? try would of helpful. vein, I kind then of of any

Tom Caudle

that Marco, one clarify would time? more you that clarify if -- question

Marco Rodriguez

Sure.

here and terms mentioned pull what marketing of in some have guys talked that about, so asset pressures about And but associated them or I'm also on then company. something control, if your that supply and the times with overall improving you chain push you've the you missed improve improve you you've I terms of was. Obviously, not are in numerous talked of mistaking, the aspects. You that? catch about utilization try that can't of your to didn't of can cost-reduction strategy that I got quite exactly your costs commentary, and it some

Tom Caudle

competitive be we way would certainly that we forward through talked of competitive improvement life. become in going to we move is about a Process which environment, Well, very cost-cutting to initiatives operate. a these more

and of going We improving focusing the material on our to all business. and internal going scrutinize chains, of we're to efficiencies, aspects all our be raw supply are

will anticipate One really significant specific as petitions certainly of on all we out is having the positive things and of have these any sharing a the based positive share that trade rulings. increased they when don't feel information effect But on to volume it. of the base evolve, we business we our numbers comfortable yet. throw there We that

Marco Rodriguez

of there from like, for XXXX is a cash want flow usage? loss just Got perhaps kind to quick operations or of the question, And a you. last kind fiscal confirm expectation looks

Chris Smosna

months. through It's first a nine been usage

is of around a the into working hopeful hovering end -- we're million, from As slight going it increase the about into generate At make that to to ended zero. we $XXX quarter, was position, fourth a the go but quarter, positive on working capital. that adjusted efforts we which We're capital have December.

So, quarter our we're and typically And working us. is QX that going a bring can. be on to we'll continue we efforts to cash in for actively drive stronger to try to down, the when that

help performance year. cash So hopefully, positive that of through end should the the stronger flow also drive,

Marco Rodriguez

Got time it. for your lot Thanks a guys.

Tom Caudle

Marco. Thanks

Operator

a like Securities. have Moore And line it question from we the you. Daniel of with CJS looks Thank follow-up

Your line is now open.

Daniel Moore

versus Give again. or least change A a non-PVA. us non-PVA? year for but I'll gross at. PVA margins I you you the least at portfolio maybe sense year margins at of necessarily broken Thank down know versus over the the not, those in in a if haven't the And crack give delta PVA the couple just past,

Chris Smosna

typically pretty discussion quarter of We as was net tight Dan, the of much then Yes. this for, that's keep that XX% don't the is not year that XX%. sales, I limit to the through answer before the Chris. net of pretty percentage know consolidated typically our kind disclose we -- which you're a We information. it date, vest. the looking but to to was PVA sales

Daniel Moore

was guess I Understood. I what get… trying to

Chris Smosna

Mostly competitive it’s for reasons.

Daniel Moore

is efforts I given rulings? it's as million cost-reduction you. got about but June EBITDA quarter, the quarter, sort off in baseline -- guidance you that build And reasonable think a fiscal XXXX, for I know of some the indeed. and is $XX run a Yes, the maybe or rate those that of then stronger the favorable little seasonally to QX

Chris Smosna

in than roll that can would could but we that as believe into better achieve We that we Yes. that do we guidance year we QX, hope fiscal XXXX.

we As that believe we the is next topic. the provide earnings guidance more But to guidance on get do achievable. we'll call,

Daniel Moore

is this yet have up you but an and quarter, it. week this shapes I sense just Got early, do for then purposes? lastly, a modeling And a know extra little for how fiscal XXXX

Chris Smosna

XXXX year. XX-week fiscal year a Fiscal is

can model an that, year. So fiscal not be will week in extra you there and that

Daniel Moore

year? will this fiscal one there QX to be in likely relative So less

Chris Smosna

the QX. in had we additional Actually, week

one will So of XXXX. fiscal QX additional it less week in be

Daniel Moore

you. Thank Okay.

Chris Smosna

You're welcome.