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UFI UNIFI

Participants
A.J. Eaker Vice President of Finance
Al Carey Executive Chairman
Tom Caudle President & Chief Operating Officer
Craig Creaturo Executive Vice President & Chief Financial Officer
Chris McGinnis Sidoti & Company
Daniel Moore CJS Securities
Marco Rodriguez Stonegate Capital
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to Unifi's Second Quarter 2020 Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to conference like speaker to now Mr. today would hand over the your I A.J. of Finance. President Vice Eaker, Please sir. go ahead

A.J. Eaker

Thank you, operator, and good morning, everyone.

On Executive Chairman; Operating is Al President Financial and today Creaturo, Chief President Craig Officer; the and and Officer. Vice Chief Tom call Caudle, Executive Carey,

found forward-looking quarter certain call be be conference call within Management you will that call included of securities that management by in the will and this laws. referencing a link. unifi.com During presentation the meaning clicking statements today's webcast statements be can at the second federal advises

on Management or markets cautions and results that to implied current These of these forecast expectations, materially Unifi certain differ which may and and/or statements statements the difficult what are risks about performance Actual not is are expressed guarantees based by future predict. projections outcomes operates. from statements. are estimates these in involve that

with and adjusted may on on results. non-GAAP are and disclosures call. SEC advised that EBITDA, such Unifi's directed financial that maybe debt net factors capital, the this various certain measures XX-Q filed as forms impact please regarding be adjusted the to working Also, You discussed these XX-K

turn Al over call now to will I the Carey.

Al Carey

polyester flooded us of yarn both India. our from imports years. us in thank countervailing on textured the imported determinations today. and for expected the are duties reached market recent as associated were in pleased discussed heard assessed past, you A.J. in yarns that as all domestic finally for to report Thanks, being duties I'm you've China and subsidized and joining final And antidumping have December, and

our they level on as playing these advancing field. welcome we are compete critical announcements a steps to So efforts in

have product we as our demand and our line, quarter a in fiscal to share we on the We've we grow local about excited these in third already the to markets enter market line opportunities XXXX. pickup regain as specific and we're top entered seen especially

solid Parkdale and sales as in across at performance operations able showed exception segment improvement to QX of we second venture. our the we quarter, achieve with around our most gains joint and trends turn Unifi. Nylon our business the During are our sequential profitability the of

However, a and do. we to have is still work the bit uneven recovery

cost work our Nylon the performance. need We're taking performance actions cost to focusing basis realization Americas team SG&A on Price core and also our on This aligning to maintained see flow and cash we're a business overall significant and improve competencies, validates structure. and pleased decrease the revitalizing improvement. strategy our our of year-over-year also

on Asian cost We're volume, encouraged now. with and generation, trends sales control cash our the very business right

of environmental to going details, customer for there than customers the to Nylon the broad we remain which Tom is as but Additionally, free. through some had consumer business at was well see anticipated the more level much as our is momentum to we committed We're disappointed and those for a sustainability, continue you textile also walk it at lower in provider. and full-service that bodes this Unifi segment

continue to half, role momentum. drive to that business well plays deliver go-forward year-over-year our and with develop remain to innovation leverage in further and for customers, assets the growth performance going we're overall Nylon positioned highest efforts. a critical of our We're all our And the encouraged second we in programs the and

company's right going for the now of call high-level during to second quarter. the I'm Tom performance Tom? our a turn discussion over to

Tom Caudle

Thank good you, everyone. morning Al, and

improving income came results with year-over-year quarter on adjusted sales, basis. second a overall EBITDA expected and as Our mostly in operating

this some had meaningful also We with REPREVE sales continuing products quarter to accomplishments growth. our lead

had the continues in momentum cost quarter to was higher we meaningfully generation positive continuing cash structure through improve. as flow half Additionally, first that the first year-over-year our

antidumping finalizing news assessed XX% also from the are are whereas Trade finished and countervailing China duty generally from on we consistent on These mentioned, positive duties rates the with quarter with imports U.S. higher. rates. preliminary Al to duty fee a higher represents As Commission, commitment time that top the rates International it outside of resource significant spent existing of process. and import culmination the duties India and rates imports and from at note $X in Unifi, a XX% is This from approximately million XX-month and important we over counsel of

significant the to Unifi were compete U.S. necessary in While market for yarn. costs was for appropriately textured able we to believe be polyester this

said, to see as ability recapture believe and begun we That take We XXXX. million. an will orders have the annualized for sales fiscal $X factored fiscal in only of a on in half that ramp to have enter up lost uptick million of the in have an the to already XXXX, minimum time business basis recapturing we second initial $XX and thus we

U.S. With or from China then focus is environment, market. continued competitive fair whether a yarn our India closely shipped are monitoring the polyester on we through third-party and textured countries entering being

to Additionally, it that in one important President. China by I was think Phase note on the front, regulation is deal the the signed mid-January,

at inputs. XXX At parts on this machinery point, XX% early Textile to decided the White Chinese and House are included also fibers those tariffs this including yarns maintain category. in has section and textile

have being, significant Unifi. For the anticipate time deal one the to not impact do generate that Phase any we changes to

results. to second turning Now quarter

in Asia. A XX% the very pricing U.S. were increased cause lower-than-anticipated the demand in year-over-year pressures during favorable branded products volumes quarter. second our our year-over-year Total below of certain on sales strong quarter. on come to a results global expectations basis sales results along just primarily result free comparison, a from While with in for products

was volumes. we meaningful, Asia, the sales driven mix selling due margin especially experienced our average favorable level While continues Nylon of platform business testament prices, the volume we And fluctuations, REPREVE and offers. cost lower by to raw material desirability less to our pressure a pricing quality and in portfolio in amidst drive the momentum our the pressure lower international to was while sales and saw a mix increase that

but we as have build to recapture and with U.S. that in duties confident the to we year ability share the progresses. the environment the in the As I incremental business in said before, market volume place remains hope new are and current Americas the challenging evolving,

commercial technology the critical value opportunity front, is and our for and planning. On for customers that bring to circular initiatives our evolving innovation the

Our commitment across we continue portfolio. to sustainability as strong and remains innovate REPREVE to our

example as color as recycling separation how and allowing VolCap we that removal. with volatile One novel and of for have technology entered is are IBM now regarding optimal molecular memorandum working chemical filtration a research catalyst our sorter, as well of leverages IBM recoverable acts a contaminant into their and research understanding technology.

technology many extrusion to melt energized an recycling this aspects provide to We and and emerging including expertise to feedstock, demand. insights are development to global scale bring technology regarding of meet

Asian country recent Next a stretched and continue their more has segment. products jackets Free to examples growth few REPREVE-based retail. of XX% Pant TruTempXXX The commercial sustainable cycle with original to Khaki using driven Alpha Dockers, at technology and tech insulation. our by free expand emphasis our is is and of on their was adoptions over all-season producing converted

be and is swimwear and II in expanding the bibs behind mini-flop and [ph] and PVA classic under HyperFree REPREVE umbrella Dockers line O'Neill Classic for REPREVE the will including O'Neill the with made screen which snow offering high-low is slipper, adopted and the styles REPREVE. Board and lining the blue in The Kids' multi plush XXXX. shoes. Shorts jackets all

linings the season the recycled down fleece of garments series feature of for shale sustainable in REPREVE latest new the high-power Patagonia's and jacket.

about excited partners momentum build. to for REPREVE the as and are sustainability opportunity We continues our

Now I'll walk for through quarter. the segment second performance our

Let's start with our largest segment Polyester.

from The moving industry material the automotive segment manufacturing been as costs has able with in to our acquired raw previously gross in textile are making with seen has was overall pleased automotive capturing we sales are quarter, double synergies optimizing by segment demand partially our and some companies, demand. this progress margin softer mix favor this We lower higher-margin the our year-over-year. industrial products U.S. offset base

second Asia, been market now a top Asia. see in are largest products region segment opportunity, and this has currently growth expansion Moving flourished for available. more to share has line to in spot us meaningful We lower-margin with enormous we an bright continue again although and seeing been our

We to and are cost for supply XXXX. July strategic in margin to including new to Southeast expected actions we Current Asia, improvement. better chain, which optimize position realize have partner in materialize benefits expect us allow made progress our a will

impacted pricing led was and which to by profitability. difficult pressure, market conditions and softness Brazil in sales

in year, year climate carefully to moving seem and right Brazil anticipate in this be will the the half progresses. catalyst Fortunately, We political of monitor as serve for a the conditions a economic which we as direction. the economic will second the

The Nylon industry the sourcing. experienced towards movement Asian a U.S. has continued in

to impact business And XXXX. Nylon certain experienced lower fixed our largest segment Nylon consequently, consistently volume lower as and moved saw the quarter of absorption. offshore. during programs business Two saw cost we sales an customers difficult Our calendar a our

some very grow to and global pipeline of has this lost backfill continues at rate, modest team hard Nylon solid. the The a working been demand volume because remains for to consumer

We critical Nylon believe in those innovation assets of which in a continue component remain business development to and our efforts. our

another business and this we for we opportunities in few quarters, will back continue this long-term position. will challenging leading remain to business While believe to build the a

and a Lastly, been with meaningful value our weaker to and that an generation. be has joint pull-through. significant Parkdale venture during in setback lower a saw investment Parkdale to the leverage continues contributor past the cash quarter, we margin

the With the cash now other strong from pockets, call reduce our on optimistic and to and results $XX.X To quarter in come Craig. position. in flow improvements us put the just business million road we core feeling conclude, encouraged. and second strong reflect certain momentum. our remain capital ahead and meaningfully I in the For example, shortfalls allowed will distribution continued away Nylon pass us a quarter last quarter to leverage a the some few

Craig Creaturo

everyone. morning, good and Tom you, Thank

the significantly year As of another over Tom financial prior discussion we to overview positive would begin quarter an quarter second we second my prior noted, achieved cash today. with performance strong results And flow our performance. drivers operational I'll over experienced like changes the key QX, as year have review quarter. in I were several and our of the of improved

will competitive favorable in for Slide which and partially raw material call pressures. profit was cost pricing We by a global the the presentation. on gross increased the with conference begin U.S., more connection environment Overall X of nine-month in QX, shortfall offset

through reduction headwinds Our benefit a income. but to operating flow as comparable three we experienced notable SG&A, in efforts cost

generated Brazil XXXX comparably losses Asia. QX decline from currency rates in a QX an foreign transaction of weaker First, to resulted exchange from $XXX,XXX XXXX. comparable This and unfavorable both

while a of positive business for is strong is our for Brazilian neither Asian dollar generally our reminder, occurred but those a As this quarter. Brazil a strong business U.S. real positive generally

trade the commenced $XXX,XXX. approximately involved And exit of sourcing for the recorded associated the legal Lanka costs impact fees associated Next a wind Sri with operating and a and our down last sales petitions. income operation and plan we to severance

to quarter the petitions expected expense fiscal in to but the apply triggered XXXX XXXX expense be finalization QX favorable We our XXXX. of December those third a generate to to that in $XXX,XXX resolution

of not impact does year our full year view fiscal XXXX. This

for Over performance these activities. the XXXX fiscal spent the that petition course the we did not $X.X had million fiscal unconsolidated a of change $X total on accounted negative from XXXX activity, $X.X QX of have million XXXX, of of have $X we repeat undertaken in trade and in quarter. in and of credits year The million, Parkdale shortfall million current the affiliate tax

underlying shortfall the and than the tax the year, $X.X the more income Excluding million net despite when is in by by Parkdale ignored. improved million prior $X shortfall Parkdale benefit

over associated tax effective the XX% fiscal of with with applied tax amount were XXXX for which first half forecast expectations year year rate XXXX $X.XX Net and XXXX. XXXX rate of Our per or earnings. the a year in effective income rate is year $XXX,XXX at in less, of improved respectively. QX XX% QX XXXX. year latest fiscal earnings remained places our and And taxable of consistent lower is share fiscal rate full significantly U.S. our fiscal FY the

review the with of Moving decline that I webcast significant highlights volume sales we sales X.X% to Asia Slide growth in by partially Nylon X in net segment. volume offset by presentation, increased the will the was Consolidated experienced segment.

decreased materializing Pricing cost raw but by trade textured material X.X%. initiatives Polyester in customers. the are encouraged the edges environment lower we front see quarter, segment yarn of we as was returning with sales the impacted second our

slow impacting sales XX.X% programs mentioned softer a automotive as have to Nylon As customer decreased mix. been we a large transitioning products of and last result demand quarter, polyester sales certain overseas. industrial due

and XX.X% X.X% increased global pressures, their and exchange Asia despite declining volumes despite while increased Brazil, material international Sales in competition. In uncertainty results and performance down economic costs drove currency sales strong foreign for volumes competitive pricing. segment trade raw as the continued

Sales be a of recycled REPREVE as a remains our position as in attract products platform maintain market. The to engine continues growth led of quality the programs leadership validated. way continue we REPREVE the to brand strategy, in Asia, it Asia and

Consolidated gross Moving to associated from profit increased X.X%. increased to margin on $XX.X on million, million $XX.X while gross to Slide from X. the profit X.X%

improvement with overcome this raw material cost the were are pleased able with and U.S., from We aid environment we Nylon. shortfalls in to in the

from material a fixed favorable a lower gross faced and Brazil during generating decrease competitive pressures of doubling XX.X% to X.X%. revenues rate raw a segment declining its a a margin benefited dollars weaker environment terms absorption of from XX.X%. declined to cost more from environment, due experienced from cost a at to this as margin Looking profit with Polyester perspective, of primarily percentage cost gross in and sales. Nylon primarily X.X%

fiber sales are mix seize used a as initiate these margin carry which and lower significant Asia's sales, staple new to in further currently customer development. Lastly, products shift profile, programs included

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

Tom are our as operations. we However, solutions efficient constantly chain earlier, effective and for supply mentioned more evaluating

progress multiple materials raw recycled are our making the sourcing for on of operations. one improvements We to Asian of

fiscal QX We to results costs. did on were from $X.X the equity Parkdale's receive reflect quarter but in from in during a approximately affiliates. There the decreased distribution from Parkdale affiliates XXXX. $XX.X we million period second first elevated operating affiliate equity XXXX. a of distributions lower no quarter, year Moving of X. earnings by leverage present to equity primarily QX Pre-tax million Slide XXXX

XX, debt weighted X average debt, June from $XX.X the X.X%. or XXXX a December Slide rate in $XXX.X We ended and cash million while interest million, improvement net period December debt XXXX covers highlights. was at was XX% XXXX. our reduction At

that routine for reflects our levels a balance December the consistent elevated with As the period. position working the rest capital typically sheet, of are shutdown

foreign continued cash indicates generation position cash by solid our Additionally, our operations.

that release. reflect a Before for was things moment as contained adjust opening quarter. to today's X questions, in occurred up some context, Slide to a during provide press our take to decided expectations details guidance we've I'll few the our that

sales growth in be automotive and continue demand to and growth into to We significant current the the to industrial we to now XX% headwinds net growth environment. sales but by translation offset have fuel in volume, Asia expect products foreign the for is Nylon experienced XX% in additional lower expected segment, currency

a in we've take tailwind see levels million. some are fiscal expecting in While $XXX will expectations the in fiscal take hold come between moderate to reduced short-term, sales impact we and anti-dumping Thus XXXX. year million this results and expect to have time positive our fiscal to we closer to XXXX slightly substantial a $XXX XXXX year to more

moderate in completed Our outlook some the polyester but the on for from market anticipate does that share sales majority restoration ramps initiatives, trade up year XXXX. of our benefit business fiscal

in to fiscal net significant continue profit recovery over better short-term provide in efforts and growth for SG&A operating And growth year cost still Nylon polyester, be the in and likely our pressured noted Brazil, will Asia, we've EBITDA. will the meaningfully XXXX structure income, income, issues adjusted while gross by in

$XX our estimate Lastly, expenditures we million of lowered have the to million projects. capital based on timing $XX certain from

have reduced be our for expectations lower. to tax We or our effective now rate XX%

grow leverage pleased we our are chain global in fiscal further providing our the to portfolio, a expand to and innovative platform over forward fiscal growth. year we XXXX supply Again, XXXX look improvements with for share, significant and market unmatched

open for line We up will now questions. the

Operator

with [Operator Sidoti first Instructions] comes our And Company. Chris question McGinnis you. Thank from &

open. is line Your

Chris McGinnis

situation of questions. morning. issues current the my through positively China you, maybe kind could and be maybe how could see current or just business you for Maybe playing you you a positive kind for walk there. Thanks. Could it with Good any your maybe that of we Thank just taking impacting start out negatively?

Tom Caudle

and the mean I the encouraged really continues grow overall a Tom. times over expand. business film is products. Asia. many We've value to staple product growing this continue higher in about and our we It by talked rate are mix chip be affects staple in flake much Chris at to we margin, fiber it and the chip -- how and accelerated we're what are but fiber the our

a So, are the little margins depressed.

we probably source the But that's cultivating basis. XXXX. see help Malaysian are we the effect to as on term of us improve margins we've won't said a in until that longer raw a going before, early materials We of are

very So, we Many sort a platform our continue of business for to good opportunities REPREVE. be encouraged. it's to and expand growth

where we of that's So, kind are.

Chris McGinnis

be just could do of that you -- coming though. Are And relation input positive in in is anything your to Sure. kind think for businesses? a businesses start impact that region you that that off a and you hand? impact seeing kind coronavirus Would to of way the you on

Tom Caudle

really we Chris asset-like. know. don't We're

situation. point think announced don't by have situation of negative to think the we been be we'll to in That monitor So, we be but impacted there. we over downtime changes kind and forward. know extended substantially our some business or don't positive this There go at people we'll it's let going time as

Al Carey

we probably I Chris little through negative. days. we'll no nothing on any get ground going won't the to shipping in factory were any so on shutdowns slightly But don't but have kind that two the better in positive to we're we a assets significant of know, or handle and lost no day next bet China, dig I have If but it. or

Chris McGinnis

sales think should just for out the recapture to I around just I time? that you that. Thanks in lost one mentioned mean And over and you then is able you annual you be Okay. anti-dumping, last think one what

Tom Caudle

Commission. Trade International decision the of Yes. The the end the brought year final by

decline a anti-dumping imports at We've China China rate. decline is from meaningful India. -- very seen the significant imports XX%-plus in on XX%-plus, and at from a So, in India on duty is

what encouraged see. by we very we're So,

continuing monitoring bit, some the product into the We're third and to and around see moved at countries end quarter. that of our what we're imports or in demand we -- but second going to we other see fourth those recycle if increases quarter our a saw encouraged have by of

to don't where get we think we we would So, we thought be.

Al Carey

five want sales our last have weeks. wouldn't definitely seen or in I in of shipments a to U.S. we but five weeks, the project off pickup very

Chris McGinnis

Okay. for back in you Thanks. questions. queue. Thank jump taking I'll my

Tom Caudle

Thanks Chris.

Operator

you. Thank

with question next Moore Daniel comes from Securities. Our CJS

Your line open. is

Daniel Moore

for Al, Tom, Craig morning. question. taking Thanks good the

Al Carey

Dan. Hi,

Tom Caudle

Good morning, Dan.

Daniel Moore

a mix. talk little about the to wanted I bit

in it continues to alluded just over appreciated. You Tom, up of revenue. XX% grow PVA now I to detail so

look the eight staple fiber with and four expect over that chip sales margin term? turn out continue you the PVA you of, to As outpace will? do flake a When do we next more to you benefits little over more and, and bit higher mix quarters, to expect longer yarn to if sort favorable products maybe

Tom Caudle

opportunity continue. fiber are chip We staple greater than filament much the the to is it's Asia. for Dan so think and going in what

So demand we're higher products be to it but Really demand it's is just chip the margin, products continue focus and a going a for outweighing just lot the improve the those -- improving our chain of situation fiber particular for the to going to filament type growth. to as grow value. on filament and is well and there's is and staple supply for of

our and the on going to we're the chain So on to end those remain focusing products. margins improve of lower vigilant supply

Daniel Moore

least Asia gross next the couple profit for dollar on of it at will say be growth the Is years? in continued right focus to that

Tom Caudle

I think say. to that's fair

Daniel Moore

cost customer would in plans Do the elaborate are might Nylon, if maybe you to And you of there to does, the revenue? or beyond rationalization. detail shifting continuing that there offshoring take be take capacity great? it terms lost More then see trend current reduction, can of And steps too? backfill steps Okay. some you to on reduction gears

Tom Caudle

quarter. us. many shut important customers -- been the opportunities Dan, We expand sector for years. We're very with. to REPREVE a of them grow some a It some fruition third that We the last couple the had for course of facilities talking fourth a has and and other come other Nylon during year-over-year. we're we has we which us product important Nylon, been declining but still over and line customers can very and expanding quarter have for will about it's of with

We think that on back remain committed exist and we -- pipeline. possibility the to that growing track with innovation through business our and getting

with And so customer base working our we're today. that

Daniel Moore

expect seeing relates And Okay. expand me -- for North polyester larger the lastly in a as fiscal you it about America talk on anti-dumping it benefit. give confidence that specifically sounds tariffs see you just to guideposts maybe the that to like you're and that XXXX

conversations or or points Just you Thanks. confidence? that seeing that the you're data that anecdotes give

Tom Caudle

I said million getting the mark think we recapturing we've feel stated are we've in of to comfortable that million well. time, publicly we that comfortable $X and with $XX sales I think, over also as

stated be we be So to we're I to we over want think on track where exactly in time. publicly there

Al Carey

low the would in And were saw when probably And up think tick work December the made the quarter, see be We of quarter and business. priced in July. U.S. back business. year the U.S. the And XX improvement it towards to themselves the announced a through to I Then once saw was fourth some business was these up positive a better in -- we tick in sales. in in inventories announcement of then waiting first last it calendar but the We little happen we'd of got market. have little end what nothing the fall. the we really see thought the happened. We a

of the a week of January of all were We've strong what sales seen say let's December improvement doing. and we significant last improvement,

in So the we before. are negative column

staple fiber in ago, and same took was build the a slow I anti-dumping I'm how then it we expect and see over thing. positive I would but know -- that continue like hoping several finally don't And that big. look on it if I years the that at Now things to back off. we're but

Daniel Moore

the still income Parkdale, positive in impact XXXX? any I'll the in statement. I may. assets And regarding more significant And view fiscal terms helpful. or least decline through It’s year-over-year those alternatives flow thoughts potential of first your changes of if free a of in little half sneak the that a on one cash strategic Are for generating investment? obviously, the bit year at

Craig Creaturo

this the that I some last business had really come a cotton good but they definitely manner, mean than where continue definitely and continue good elevated we're seeing period investment pointing as some they've Dan strategic out year believe crop is challenges Craig. think still are in continuing for I business. We to they've some that very come them our a their obstacles costs. had operate definitely us. portion up different improvements They've you're Parkdale into to has to earnings. a like partner with really that with you're feel to of in in for to us very good make And the

no anticipated So there. changes

Daniel Moore

Thanks color. for the

Operator

Thank you.

question with next Capital. comes from Stonegate Our Marco Rodriguez

is line open. Your

Marco Rodriguez

taking questions. you Thank for morning. my Good

Tom Caudle

Good morning.

Marco Rodriguez

if verbature the more believe used about I And brought you pricing this specifically guys can being bit aggressive. your of was last little I the you pressures. about some described have you international wondering pressures remarks of competitive some a talk in out you as quarter, levels seeing prepared been kind

as very you Can bit to go there of around if far would region the particular specific color this is out you're a as seeing sort helpful. or dynamics competitor? little the are into be maybe kind Any of maybe drivers, what a more those color a

Tom Caudle

into region Southeast prices America we seen Malaysia and Tom. is uptick lower volume anti-dumping Certainly, and when We we've some front Asia. around this Thailand those and No. come the Mark, the be our international -- that from suite we there are in some from on from region Vietnam file the movement into North the an volumes. would monitoring knew

of we'll normalize against will will But time. capacity everything We antidumping over as out more the anti-dumping think not we well. of anticipated. which option have because for initiating flatten if we out the get countries always benefit And and they the of action

Al Carey

throw on Marco America. also Central I'd in

gotten market. in protect be Our market up sales And getting to I quite our an it's that as share. not XX%, working sales. on in decided opportunity think we're there's I right and market But the very -- are to think competitive pricing And volume aggressive. our that we've

Marco Rodriguez

profit basis And talk give second half my the what gross maybe into is or you your your math that it's doing see points. about progressing it. right Got at you fiscal on like margin talking take guidance how a here implied little of 'XX Can few looks a if bit about XX.X% looking of about fiscal sort a for I'm then 'XX? the numbers

Craig Creaturo

Yes.

on think right you're Marco. I

we're think actions that expecting I anti-dumping, like then including probably but probably we're be year QX. total. the is growth to the we noticeably really year it feel a that to bit that in in do in QX average our of quarter some usually more full strongest margin full and some quite bit and above talked seasonally see gross show will expecting higher here than XX% for little the just benefit to we'll be think XX% a QX We about the we've

Marco Rodriguez

CapEx a talk about you you months maybe you little maybe would in priorities just helpful? reduction talked the And a priorities some talk allocation timing about bit if next helpful. you see but you That's slight guys more can then have. I about can aspects XX your if know on be the based the capital that in

Craig Creaturo

Sure.

I the for machines us to detection think We've continuing capital in. be about the we're coolers coming are have projects on that EVO we thoughtful expenditures. that the talked larger

start will FY to first bulk that wave and in out we some for then that of of dollars anticipates forecast in the those cloying spend XXXX. current the XXXX Our those machines FY

right right strategic right investing areas, in the the We areas, we're like the maintenance areas. feel

feel $XX being to anticipating us. or forecast We're So year the for able continue net specifically for debt. also we to that comfortable million reduce is a very level debt

the reduction strong that then like and we'll a QX nice -- X in as be anticipating. in in to that working bit a to build months. on last we Q reduction especially seen feel We've that QX our XX% we're continuing We capital, invest in

that we the prioritizations continuing However that's capital expenditure think capital now. debt paying right the the investments down really investments main plus

Marco Rodriguez

last I And if it. question quick might. Got

of terms clients? the second row expectations again XXXX? a quarter kind of little calendar industrial in and a about hearing talk out sort what the market, for you're can there. from bit are Maybe their remainder those called year their you if anecdotally of here You in of weakness just automotive What

Tom Caudle

think I quarter first the strike still period. that during GM of and we're during a the slowdown our fiscal industry -- in saw -- automotive general a year. our second

reduction and others have models what Some you so. of announced

a quarters, we see where uptick, fourth our I place the to a happen and took and period before So, fourth expect and third we whole from all but during little the total may are recovery don't that slowdown watching we industry an we as in in what's of but think were quarters. the saw going that bit third a

Marco Rodriguez

Thanks appreciate guys. your it. lot, a Got time. I

Al Carey

I just to close why I forward I on and turn I before comment so over see up, moving A.J. I would optimism. bit business broad the make Yes. how thought a thought, little we it to have

this quarters back continuously sequential two fronts. three business the is you year, moving I'd and bit. think the quarters if will a quarter improvement I on in say really spot are a that, sequential the So, And four little last describe and last time would the continue improvement. were we many about And forward tough in way think I best in

few the but surprises. a -- with recovery uneven And has been

or as So, to overall it business, I diminish as those. And six what call weeks. But encouraged last far I let's fronts. particularly would positive The I'm sales very U.S. volume five say many the the here's don't want with is positives. on

I can finally five that so want project So, that's to weeks, antidumping definitely on but positive improving. appears looks much hit. is it that to we a trend don't see it the like starting

weak out look was Nylon, X%. at if at it our took up you if And X.X%, you actually was which the revenue,

a better little trends about our feeling I'm there. So, overall

The and I'll focus is generation are puts and cash thing board expect you on I to controls very of in that a those cost our a spot other big it tell both and continue. good

about so business customers Asia of discussions I REPREVE on the last in part and it's Nylon positive think is becomes an plastic. fast very REPREVE call in have a discussion And and it impact it our about And our such on interest press, ESG let's the the think on as as more their Our in to I and and I news over positive the beginning REPREVE. months, more two important much such growing. hear several, ocean with innovation economy

realization price two I where in put realization Asia, price it we need I ideas would and look have but Central ways on expect Price Nylon we in place and those are at Nylon. two and expect some definitely several And then Americas, in efforts to Opportunities and in plans there some plans, are I'd realization there. improvement. different different

as start the year. I they'll keep the textile departure of that a to I because we our down, full customers but really anniversarying as end company materialize we'll this think, us towards Nylon portfolio fiscal our plants a the of see shut of partial. think, And overall part intend not

I on but hard. we're way been Nylon work so working thing, looking I'm business. that's compelled at to mean this it And the overall. that's We've the

I But us so feel I positive -- making very progress. to the of that year. we're feel we're second for where sitting -- very of do the of -- though. a of lot think have lot half about here heading still work all We a

turn over with let me to it A.J. for So, the that close.

A.J. Eaker

Thank for you today. participating everyone

Wednesday, XX, the Our scheduled tentatively March is a.m. next Eastern same for XX, XXXX quarter earnings Time. follow for April at today's call. conference you ending call a joining that day Thank to release XXXX for X:XX with third fiscal

Operator

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

You day. great may Everyone now have disconnect. a