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UFI UNIFI

Participants
A.J. Eaker VP Finance and IR
Al Carey Executive Chairman
Tom Caudle President & 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, ladies and gentlemen, and welcome to the Unified Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Mr. A.J. Eaker, Vice President of Finance.

begin. may You

A.J. Eaker

and operator, everyone. Thank good you, morning,

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

that During this call, Call the found will be link. clicking unifi.com by Quarter can webcast and referencing at Fourth be a management presentation Conference

cautions are not in risks of today's of which by forward-looking statements Unifi be on predict. may operates. These advises difficult that is the are securities from performance estimates about Management statements federal will and/or Actual certain implied you statements are certain expressed, the call involve statements that materially laws. statements. and expectations, current markets or results guarantees differ Management these and to the outcomes based included meaning future that what these in projections within forecast

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

call will Carey. over turn I now the Al to

Al Carey

focused the we've strive domestic thanks the is being polyester Thanks, preliminary some yarns. team to from antidumping on continues of the of textured synthetic more market of that like level yarn and and here Department recently playing recycled determinations couple A.J., field the this world's innovator in the announced And mission Commerce the Tom. call of towards The good today. Unifi leading and to good U.S. morning, as items affirmative China its become of imports over start at hand India. in news remind you the seen quarter, the and we're for I'd of that us joining on everyone, to before to to level minutes take I a high

but the we pretty for in we've years We're monitor going that even to of recently to business. some our to us evidence continue it opportunities quarters overall expect of these some in and very the ahead, and result decisions, seen really in the outcomes meaningful

our our Next, think the with no with of our we're finalized aligns reductions And reduction environment, on we quarter, this year. about for what service and better accomplishing I during and run fourth million SG&A the with current a in customers. our is pleased team proud $XX of I'm operating rate quality

upgrade expected operational our be product eAFK in Lastly, technology, broaden our June, user efficiencies upcoming we texturing which of the in Americas capabilities to an to the texturing years. to portfolio and our new announced in the is exclusive Evo the improve

our to end nearing an of search, our the make Also, CFO we're final and update, expect determination a soon. we process,

strategic abilities While our a very will globally, and excellence working feel PVA profitability. confident revenue I and this year gain to market Unifi being good keeping manufacturing and be further leader for focus share, sustainability, a investing our fiscal one a restore that in coming in and grow on

turn So Tom. it with that, me let over to

Tom Caudle

Al, you, good Thank morning. and

organization. focused cost As and imported more to by we've lower execute see intently yarn. a innovate to stable driven year, against the levels the partner, material we new containment results, and our our organizational strategy throughout we on of environment a We enter and positive it implemented, build from remain fiscal changes continue more deliberate expect raw initiatives, competition

maximizing one in necessary the use in optimize technology texturing of that. steps quarter, just to and our have As The been taking around stated our with But growth. fueling last landscape, international we are is operations our the the domestic new invest opportunities I changing Americas. example of the

XXXX That and caused fiscal our legacy account line Unifi's that imports, expectations. we against see top to PVA volumes to momentum. us you'll fight continue which sales. time first ever, for of our over results, quarter now headwinds for said, revenues high low-priced XX% miss fourth reflects persisted, sales the to the of And PVA Moving strong

commitment This one synthetic innovators is a of through PROFIBER testament and on to of our leading yarn recycled REPREVE and our of being the offerings both platforms.

recent We an early and 'XX quarter trade to of exciting new in continued across are portfolio some in also seeing efforts of volumes commercial fiscal due signs programs our both products X the developments.

few for indicators the key quarter. performance fourth a review Let's

that in Polyester, quarter new the consolidated have operating compared to The of updated well by and driven our three million prior to scale sales of our as $XXX.X in segments as growing let First, international out Brazil me are $XXX.X year, of decreased Nylon, point lower our reporting volumes the operations. as we segments FX a Fourth result segments headwinds. Asia. million

revenue However, impact, $X.X X%. translation when we excluded currency the just increased foreign million or over

many Additionally, line throughout by underlying X% year, foreign growth with they headwinds grew translation. we full top the impact faced when excluding the the we our fiscal X% despite of of year currency

the We now sales in sales. quarter, a for increase comprise also consolidated over again, XX% net half which, PVA achieved of our

primarily by we've competitive rate. the However, import tax pressured unfavorable discussed, issues an drove was which profitability also

upon are certain improve While continue can we profitability. to control, issues outside recognize are of levers some we our our pull to there

move next quarter across helped positive also collective goal us run reducing has prior cash us operating improvements operations our our on XX% as For flow with 'XX in $XX to in of along set achieve up SG&A globe for significant from focus operational we execution effort, four and heightened performance the year. around our rate a fiscal off million. example, into we of by achieved This

manufacturing and in also a products with Americas, As excellence, high-quality operational work improved innovation recycling. the efficiencies we position and remain our focus revitalize in committed continued on to we to superiority

profitability this, improve of help achieved, All and tax our if bolster will rate.

to increase REPREVE our adoption continue our with accounts, including long-standing we of key Commercially, the relationships.

as entire for DeFeet its performance, equipment lines located International SORBTEK Quicksilver line. expanding their outdoorware shorts Hickory, in REPREVE has their socks nearby walk few using been beyond REPREVE across properties. North as sustainability, Let through throughout a me high and our Patagonia board including technology is examples. is wicking Carolina backpacks. moisture well in backpack into

interest DeFeet supplying his de recently These on REPREVE. to sealed event. has the Ts team T quite tag, has a T-shirts Cafe have and with Quick-Step inside X references throughout rider the Tour is Hard Of performing hang on is Rock made collar. to and REPREVE. been the introduced stocks bottle REPREVE Alaphilippe branded REPREVE noted Julian tag Each well heat also REPREVE the traditional France

in by Walmart Walmart proportion Lastly, of to in apparel April, Unifi suppliers. has polyester summit U.S. sustainability Bentonville, displaying the REPREVE publicly committed variety its and showcased goals, mobile of recycled including tour across Walmart process increasing to at to XXXX sustainability a footprint. Arkansas, REPREVE in XX% employees the recycling content the

Annual demonstrated in This company Walmart its June The at new featured showcased the REPREVE. Meeting was effort them vests introduced for when of in press. these associates and made it are Shareholders that

As momentum continues REPREVE partners. to the build, our for about we're opportunities and excited sustainability

some Now quarter. segment high-level the last performance let's for walk through

on to marketplace. Asia Brazil. Asia increased and a profile. Unfavorable saw continued line Brazil foreign exchange which with weighed highly growth competitive lower both sales top in albeit First, significantly, experienced sales in due a a was drop by PVA, currency margin in performance driven

raw in driven pressure international pressure material sales fluctuations. businesses we and the The experienced cost by was primarily margin amidst mix pricing

the of by to our future. The However, play and continued drive continuation which the was profitability levels imports, on of into polyester momentum portfolio significant polyester business selling dampened of line. our high pressure major prices PVA yarn product

our garment teams production. sales to aggressively full volume a backfilling transitioning certain customer lower This in due to will overseas loss programs experienced that Nylon XXXX, segment impact but capacity. the fiscal volume are

our fiscal this continue year. During the we domestic the next a businesses material more and tempered quarter, environment, optimistic are throughout experienced that will raw

present We quarter the a XXXX. a XXXX raw recent than improved period. and guidance, the from operations, of to meaningful to throughout prominent lower textile considerably that as elevated hope seen material they our to cost equity cash fiscal continue will be Parkdale's the of the fiscal profitability have see the domestic experienced generated and anticipate in most not environment XXXX. stable We more performance supplier much we as flow Parkdale fiscal do market of in were affiliates X-month fourth core lower have experience earnings we Outside an our in indication environment was

I'd on of like update Please status recent and to XXXX with the October to in for filed provide Slide presentation the a developments. our me quick visual. we webcast trade now of petitions turn that X a

China significant As material after dumped textile these China. spike petitions of texture subsidized the India injury were previously from in the and months that have caused yarn saw U.S. filed, we In our imports industry. discussed, from petitions polyester and a imports to allege

Accordingly, imported countervailing the for and Commerce affirmative we XX. April due was determination to this And preliminary believe We circumstances in Commerce duties April duties imposed. efforts yarn imports. Department stockpile before surge preliminary announced Indian were critical XX, from to on of on Chinese imports received

China, preliminary their of India date add yarn to Specific XXX%, course duties below amount to a announced polyester countervailing the preliminary the announced. determinations, preceding applied from duties Specific retroactive China that imports preliminary the to XX, that Commerce and days on XX% of Then firmly XX June duties were antidumping duties in brings which another antidumping and the of above are XX% including to being place duties normal cost the the China, yarn, sold imported of fair these unfairly value. today. textured

continue through the investigation of the XXXX. announcements, preliminary these will remainder Following process calendar

subsidization dumping injury to December made be XXXX. of We expect the of and final end determinations by

I'll into to detail now more on interim pass our CFO, Chris? go financial the Chris call to Smosna, our results.

Chris Smosna

Thank you, morning, and everyone. Tom, good

expectations, exhibiting were we carry that but are noted, As cash hope into results momentum profitability our Tom sales period XXXX. and fiscal below flow this our to

change a performance and begin are overview and to initiatives my discussion into Slide helping the drivers meaningful X on the high-level are income. actions of of webcast business. net the corrective of dive hold will I across today presentation, our you see can Our will where certain taking in produce

note $XX.X by decline, you to $X Moving driven tax. approximately $X income of and of to net from $X.XX fiscal in right, declined quarter EPS million was million fourth the from the that XXXX, million this income or of of XXXX quarter fourth will than in fiscal more left

quarter prior of the $X.X uncertain included an a tax from the benefit year tax reversal million First, fourth resulting position.

in to a decrease prior the in we gross items rate of and effective few a which noted, increase the moments. change to segments The pressures our of experienced the the the was bridge across in meaningful unable level profit items following in discuss fourth rate, operating year margins, the separately, as I we quarter. of tax bridge, I'll that drove on to and the presented tax we the XX% applied achieved margin will similar relevance the slide. were analysis reach a our this gross For significant in explain a remaining the impact have

decrease This fourth basis. operating reflects down the Next, after-tax expenses a primarily approximately by on expenses prior as $X.X million compensation quarter the overhead our the fully decreased loaded of including step an in structure. year,

$XXX,XXX an However, reduction of to SG&A cost on related fourth run directly included our after-tax basis, to our reset charges quarter rate. our plans, severance helping

of mentioned EPS. of Tom $X.XX around to earlier, contributed as Then, earnings approximately less income or from weaker Parkdale $XXX,XXX

income of perspective, taxation recognized from our quarter, an of income fourth foreign impacted specific mix tax tax to effective the in of on the credits tax tax domestic with offsetting overseas, Due Lastly, This, created rates. unfavorable taxed certain pretax rate. to expense effective had the rate. in our amount higher the combined a significantly tax overall earnings earned unfavorable U.S. the lower advantage impact earnings our of inability at an decline take

domestic our tax to in has improve in detail that I rate, moment. our increase in forward, the guidance, will Looking we've effective which noted our and a earnings meaningfully potential

to Slide X. Moving

a margin. have gross bridge We provided for

international X Brazil growth Nylon, Polyester, earlier, reportable in our noted segments: Tom and to operations a have shift As Asia. necessitated

Brazil the as by presentation expenses separately, Asia the profit Asia technology-related polyester to Our combined international. for disclosures Simultaneously, now and include includes formerly the segment segment our now and segment. consideration gross segments certain reported charged

Polyester are segment and the Specifically, segment, to charged Polyester a sales each sales impacting of activities. Asia manufacturing, product recorded the expertise a of gross amounts Asia benefit support the cost charge significant where are and to for and processes The segment profit for operational for benefits sales as segment. cost segment, developed technology, thereby by the to those

to and results, comparison This reflected both no QX XXXX. XXXX segment there in QX QX difference change the fiscal our in activities to four and XXXX is XXXX support reflect the that Accordingly, development to transition QX and is being segment originating results both our the update provided the and the XXXX of segments segment profitability from now XXXX from segment therefore, reflects Asia and Polyester benefits the segment. and

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

experience did some cost raw gross profit. that we However, aided material relief moderate

While import reaffirms petition. restrengthen data our we the of domestic continue to trade market efforts position, our importance

experienced The revenue from Tom large this the fixed Nylon loss the a that earlier, cost decrease gross customer absorption impacted and a segment adversely margin rate. causing described in

Brazil. to Turning

driving a in lower position pricing unfavorability inventory midst in environment, the higher cost environment, pressures a and the cost comparatively material worked experienced margin gross against economic we raw While rate. weaker of competitive our

sales and fiber, products like lower-margin weaker Asia led the For a of disproportionate mix. segment, chip to growth staple

proud in margin These weaker combined mix decline in prior continuing dynamics to versus a gross we are generate profit of growth causing XXX Asia, basis our fourth efforts overall gross quarter. sales segment towards the are we While points the enrichment. of year

X for comparison the decreased net to the of after or the million approximately quarter. Slide profit foreign sales million pressure X% highlights of sales Total fourth exchange fourth $X.X XXXX. quarter shows in gross fiscal and $X segment

segment U.S. XX% the Polyester declined For the of levels the heightened sales, into volume competitive of which imports decline X.X%, exhibits

trend timing transitioning category and the fiscal the of favorability material drove pricing However, XXXX. fourth for overseas quarter the raw result a cost of weaker XX.X% Nylon decreased customer a continued products. certain movements programs when sales nylon demand in to as certain compared of of

the competitive sales volumes in lower local despite segment higher to continued Brazil, pressures, increased for X% uncertainty Asia benefit by In from muted a was recycled economic to of quality engine remains just The growth growth foreign REPREVE currency while and were Asia programs palpation. Sales validated. XX% spot, despite the be and strategy pricing global translation. led bright brand volumes our as be trade attract maintain position the and market. way Sales continue a PVA the leading portfolio as and in international products we in to continues a results

performance, previous margin the significant the covered slide. gross For on we items

weaker competitive a Looking relief. and primarily earlier, fixed cost at by absorption this perspective, sales was lower by the raw resulting described material impacted segment partially from pressure mix moderate Polyester offset from

to weaker declined rate from cost XX.X% As basis absorption to Polyester a its X.X%. result, gross X.X%. XXX Nylon experienced and margin fell points margin fixed from XX.X%

material mix Brazil a to economic products costs lower margin used margin a further new along to currently fiber pressures, Asia XX.X%. a And which feed declining competitive carry a environment, staple initiate and higher inventory and raw as and faced cost are with during profile sales significant chip gross generating customer includes programs these and XX.X% development. decline from sales, lastly,

from declined a As to Asia result, X.X%. margin gross XX.X%

Of elevated quarter Total Parkdale's Parkdale million note, Slide in period to Pretax $X.X during affiliate results XXXX. XXXX year-to-date flow affiliates. X, XXXX. decreased from approximately present amount primarily on equity meaningful costs. cash a December distributions is million, lower $X.X Moving since the of while QX leverage to the totaled generated operating we equity $X.X earnings reflect QX million. has

At sheet Net in working primarily balance $XXX million covers period debt was $XXX capital $XX $XX while Adjusted above was subdued $XXX liquidity capital and the percentage sales availability X total working stocks adjusted XX, approximately capital million, remained revolver approximately above highlights. We million. was domestic principal. $XXX million ended higher driven as XX.X%, million at remained debt inventory sales. approximately and working of and a Slide by million. was June

maturity in and of amended interest extend remind average able XXXX, the were XX points. the generate facility we XXXX down an in to date I'll step and basis to we credit that you December

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

to I outline questions, fiscal for assumptions guidance up related like and XXXX. opening Before would for our

experienced I expectations with beyond. to priority. bottom top remains headwinds missed performance our that progress our XXXX and start line this our will solid, optimism And We considerable positive in fiscal indicators in growing several year. reversing lead is and have revenue while

sustainable First, customer program new and are portfolios adoptions negotiations from our are innovative significant and constant.

and fiscal and this are XXXX. determinations Add-on markets continues. seeding positions these of items global recent our Americas. beginning renewed from the to our momentum focus preliminary We of to position in trade the in help should deposit our commercial competitive stabilize Each

foundation primary These on volumes. continued conditions increased growth for profitability, provide Next, a for the and temper, reductions in represent expected raw normalized of from headwinds XXXX. more and a significant XXXX to expect better our profitability components production much recent top material fiscal cost to sales higher fiscal to increase providing we leading SG&A

expect high we the range. range. the revenue With Specifically, single-digit way, that leading Asia percentage should percentage in a the in volume sales drive growth single-digit increase mid

fiscal headwinds double is Next, income $XX significant in significant drive in raw operating profitability. will XXXX $XX increase This fiscal million range and arrive severance $XX income for charges on $XX to of million. that and million operating million. range Therefore, the EBITDA a of expected adjusted material XXXX to a to to weighed included

machinery revitalizing Evo focus the purchase new our million in with of of which initial best CapEx with will serve allow includes our Consistent texturing to Americas, eAFK the and along expectation machines, $XX us equipment our other investing targeted markets. improvements on and

in in in decrease in we significant should effective Lastly, lead to XXXX. a meaningful which expect domestic rate, a the range fall fiscal earnings our growth tax to mid-XX%

optimistic about and that and opportunities XXXX 'XX. believe ahead. difficult corrective the the better a setting for steps are year, lie remain fiscal a stage summary, the taken our was we've actions In We we fiscal much

line up the will for questions. open We now

Operator

of the & Christopher first Company. Sidoti Instructions] And our question comes McGinnis, [Operator line from

Chris McGinnis

talk kind out some bit that if guess, through to wouldn't little of starting have see commented the change you positive of on that How You that's maybe us how options do the I not indication you? changing? and other don't Can from there. that. least to come walking And kind benefit of, about what customers you're that positive, environment? momentum you mind this? guess, guys just penalties the new or the are I you tariffs How out expect you a

Tom Caudle

see No, starting momentum. to are we Chris,

can at importers looking the booked to get say the been alternatives Customers is India some for the year. As is products we've a result of see offset petition. also kind happen. we fiscal that same from continued have this and or quarter of actually to the as Indonesia, the loss importers Asia these throughout use selling to China, India are antidumping Vietnam I we guess, -- what looking improvement The of we from and the looking and are who orders have other places. And it now. yarns Malaysia, China expected expect seen been have of we would and and it's -- the from and meeting would expectations and predominantly other

that's the reason not antidumping effect come announced. do delayed the that once the at preliminary or this was see you -- And that of once volume one that all did not

So out with all it time. balance will

not into some have XXXX experienced but expect to going this year. more we're has around rate budget, We And we into orders, optimistic. and booked built positive have results clothing -- increased the so activity forecast our the only substantially. pretty we There's

Chris McGinnis

you on you congratulations bit business a understanding, largely is that there it a lower of it product? that is the it's And know XX%. an bring the I a maybe business. from maybe ability PVA over guess, the getting on But maybe in into it's little commodity And dive about end Or commodity Can overall? possibility, just is my there I to -- opportunity?

Tom Caudle

who or talking PVA, to What is to antidumping about in able considered the be lower always you. some consequence somebody find anything be PVA side the but Thank the supplier that might big I scheme. would of produce on end that somewhere don't predominantly guess, market. to a opportunity, be for of There's we're expect product we the the a

Al Carey

our back that is us, primarily volumes up our volume is will Chris. Getting the even Al, commodity end if profitability so and us plants margin, improve in gross is lineup. to critical it This helping a

Chris McGinnis

you high just you What but got you to just go, terms selling in there the as the Sure. end, to thought an long what I a range maybe I of the gets to just to One, income We've year? pretty way more look Obviously, questions. your a off as coming upgrade the on range. for low opportunity, PVA. process out good X know XXXX. it's opportunity to you operating end? the for And gets then assumed of XXXX, a

that I if on wondering So was just as well. could elaborate you

Chris Smosna

caught 'XX primarily increased And The Yes, cost That lead operating to million environment, we nonindex XXX% both cost the well. on will between guidance is index trade has million, volumes. And income fixed gross profit, in driven help we're by absorption. will $XX this that pricing from pricing so gave material as expected lead are which which domestically. $XX raw Chris. better improved is positions also, to in being a is to stabilized to up growth and addition, fiscal

our processes On aspects top on technology. to of to focusing costs we're continuous in improvement to from procurement operations of new our manufacturing reduce that, all

come the the across antidumping have that's volumes because we're to to to is a of in we we lead how we we is But going that little the but uncertainty some impact we into do volumes that, that go as are and going that better bit the The confident of guidance income those provided. FY of the operating around wide, all year. in think get range from So 'XX. just

Tom Caudle

Chris, I would one point well. like make to as

the region products could to REPREVE PVA get very is commodity as well. with result of some come they Some may PVA programs, possibility, or so grow these well. in as as quoted when do real we That segments these some programs well back a a

Al Carey

of how volume And Other that very in shows in this come we fast the Chris, plan all We gradual. into of low-priced between quarter amount experiences there And tremendous business, the in Al. weeks to ago. with buying way it antidumping was in. antidumping is very our a customers first last case from October We it's way because of up pickup of know about found will the don't year cautiously the put all the the even dumping imports and this X year.

trying how cautious we on get quick. be much to just volume we're So

a very that have gradual We the expectation balance through us takes of the year.

Chris McGinnis

And cost then one quick on the There's, costs the to for guess, just I SG&A for $X.X in QX, out you $X.X about back severance you $XX million quarter. million I SG&A and costs. that that we and maybe XXXX? the Can billion under thinking question for just Should would the about XXXXs bring for in maybe talk run cadence think, rate, the SG&A?

Chris Smosna

think have for forward. in the expense going the won't our Yes, this charge, be in that around 'XX -- severance We other We and expense to that's Chris. reduction $X.X $XX small going have we SG&A was did we It million our that which did workforce. is will million reduce fiscal as in reflected range. require actually XXXX a SG&A obviously

all bit We're also think, cut we lead taking we And improve and expense we consulting for expenses, and fiscal bottom our to et million line, benefit structure agile can that. little saw We T&E, little a noncritical measures a better certain 'XX. cetera. of a will north more position fees, think bit future us the so professional fees, $XX for that, to on year

Operator

the of from CJS Daniel comes Moore Securities. question line Our with next

Daniel Moore

Wanted to mix. start with

continue PVA of And shift value products, over you chip up expect for toward PVA wins? we guess, mix is more to of Also, in higher the favorable margin of margin turn value higher to your when entry-level we higher shift more terms are Like, imply to a the obviously, staple you? XX% progress now. new value-added, towards up 'XX of added, and continue any there guidance tangible moving higher You fiber. more is I lower what that's Or for product? chain seeing do percentage margin? toward those

Tom Caudle

amount a volume China Tom. that is in substantial is this I see the you driving numbers PVA of Yes, the Dan, think growth.

supply environment continue And Central the that more staple are that The the as end key and an us those improve help and the very chip there growing to in in improving bottom better very help Asia, going improving doing We will very [fiber]. the to of to near-term margins regard in in a what of as about U.S. margins we're is place. that us get opportunities over more the optimistic chain that one and America. Asia -- be to in we're items strong there, be will well business here over

Chris Smosna

This is Chris again.

to SG&A incurring that by recorded expenses rate. go want clarify and expense the the reduce Just question that non and other and will SG&A the severance on our severance forward

So I that do on want as well. to clarify

Tom Caudle

Dan, answers question? your does that

Daniel Moore

incremental maybe But capabilities proprietary little the And can disruptions I bit differentiations. competitive build you Yes. color a guess, the -- do more the any Can the you Helpful. talk inventory about simply see you gears a on texturing during expect maybe and -- you this equipment shifting process. bit. to install little or enough installation year? What are

Tom Caudle

The then, of not than Dan, been haven't is any technology magnitude, substantially that was The in mid-XXs. bought texturing of there's to changed technology better since spent lot a reason last we actually we the step upgrade change really money machines. process the levels anything we a and what we fibers This It the these obtain we on speed fibers, technology light flexibility, EvoCooler in had. at technology. the increases from running quality is can our that which operate in

going this purchase X and be from would opportunity installed and in a the our I also it's exclusivity and to latter we're are something do, year be as gives we with into that And systems well, until time place, the advantage. through we own We integrate period, years are that excited this have which in buy so it it part signing not supplement other substantial we fiscal forward. an it's out will technology of we changing -- lengthen won't is just about management that all going really is that so It things automation have can technology the of Americas also it. we also beginning disruptive, this say, us, and exclusivity the to more the -- all

Daniel Moore

me... And helpful. for Very last

Tom Caudle

would year-over-year. one $XX that we talked within is about point to like all that that I mention we've million other CapEx are spend doing

Daniel Moore

Helpful. recent is, in Understood. material challenges obviously, which is raw environment, on me for has past. Last a the predicated guidance the presented "stable"

So price of has approach versus contemplated ranges other of range sense your the what are in can a raw price you terms in give maybe And changed oil prior material us or anything guide? methodology years? or

Chris Smosna

we to it's speaking, $XX Chris. million the Generally sorry, $XX this Yes, barrel. and about per price kind our of have dollars million guidance, in into oil, is -- of baked

have we So baked in. that

-- We material in environment. to 'XX, fiscal fiscal don't And kind that 'XX we first about we any the environment raw ourselves we X feel so in. that see we find stable fiscal or there's 'XX, the up good into of from going going quarters like feel through any indicators run we increase of a cost experienced pretty are be

Daniel Moore

will I one And in. Helpful. sneak more it. Got

as expecting year? You mentioned similar EBITDA it of more on. to How do little you're Or growth the ramp good guidance? goes QX kind and about momentum that into bit cadence is Is the for a year the of the QX. a full of think revenue we maybe

Chris Smosna

slight typically goes is QX, a year which the stronger. quarter QX, then It's be be a ramp-up But the on, and as and into will QX QX fourth will strongest. our increase going

Operator

Capital. question And Marco from last Rodriguez with our is Stonegate

Marco Rodriguez

sales. a and prior China to on follow-up on question just wanted I PVA

of you there maybe improvement for out walk in chain sort of details wondering needs was improvement. be you that particular improving a in where kind margins of what segment as the through some about assessment what sort had to meaningful supply key see a item be I kind can there. that of line You as is thinking mentioned of that can the far might time taken,

Tom Caudle

I Asia about us agile it because talk more allows dictates. in to around necessitates business asset-light move or chains mean, specific, To as supply we're be Asia, our and

it the supply -- So fortunate to competitive, change, have of situations are is new flexibility more move qualifying so suppliers, quantifying as very we we it. constantly we're and that chains around crux the and they're the that did where can

Marco Rodriguez

have understanding? Is chains the for different somewhat so become to that, that I'm that you guess, suppliers. So, need find I to in the next question, what inefficient supply is regard then you, current just

Tom Caudle

As just suppliers, qualify find we suppliers more supply. the and competitive more it expand and grow dictates we that find more market,

Marco Rodriguez

over a a PVA of but for their to of kind might Or test need bit a sort few increase had PVA Any color case, better if I kind that the existing end time, with you to you a sales typically decides process -- remarks, trying pretty that of you sort a through just out to your of mean, that customers, be takes. -- was client like long products increasing from helpful. maybe our they little prepared client for you. world taking very mentioned then will, of how the be the wondering that on is there some understand walk sort that particular years? can the and And the clients a increase of typical client of for of I PVA customers REPREVE would few products just in product adoption. are wins nice the focused their to use if Patagonias obviously,

Tom Caudle

the and because and with REPREVE I category people changing would most are globally about recognized goals, a that brand of is think talking credibility. the think brands, retailers traceability I brands be and that setting we specific top are the with all sustainability

company behind We its are the a and public authenticity. stand that brand

in motor example actively are things conversations that REPREVE a people Quicksilver, and at the there Patagonias, sustainability the the not basis. would with about talked we've brands the think only I and discussed so having and about retail, the but global are be company, other that on the and Walmart few all we past, we've And very Ford

Al Carey

think caught this involved, pickup a can goals. product really moving see is sustainable those attain REPREVE of on won't noticeable interest I've has gives greenwashing end in just reason up they have And characteristic companies XXXX since not in been And think REPREVE. many I traceability got to or going be I recycled say the to Al. sustainability Marco, I confidence this goals. the stated these of now a was And I is lot that to products. that get our they true having them

a goes So picking up time it's it's gradual. on. and definite It's been as positive

Marco Rodriguez

I just Brazil. for in terms And item segments, a if with into don't of changes of the more I then housekeeping of Asia the either last and kind reporting this the and you international release out how provide those breaking in see fiscal question, know Are or that on look to as historical sort in in presentation. 'XX maybe going of the any look you a press numbers anything missed or 'XX, nature?

Chris Smosna

we so -- periods we that will Yes, When we do comparative into have and prepare financial account our in take statements this that our result. the we Chris. is XX-K, file

Marco Rodriguez

will of quarters? periods for show XX-K annual, for just year-over-year but the the comparative the the not So

Chris Smosna

for the No, quarterly show it doesn't performance. -- we XX-K,

Marco Rodriguez

you you for guess, then, But Qs I just Qs, as to then historical track publish that going have don't publish our we'll anything forward? the

Chris Smosna

correct. That's

Operator

have looks Sidoti from a do Christopher from follow-up like McGinnis And & we Company. it actually

Chris McGinnis

I and competitive a faced issues maybe Parkdale wanted dynamic? industry would I what's that just maybe with maybe just little is and bit the ask to same of are differently? dig Or there happening about there? just sort happening they there. the acting what's you around a quickly process -- in Can

Tom Caudle

think is but their generating some their I they're do pressures, earnings, results to about and satisfied, but cost not Hopefully, future operator in continue strong optimistic they'll be are we they a periods, better business. which have in in flows. they're strong cash their No, affecting but the very region And still results. seeing

Operator

questions. I'm any not showing further

this program. does the So conclude

great a now disconnect. may You have day. Everyone,