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Cooper Tire & Rubber (CTB)

Participants
Jerry Bialek Vice President and Treasurer
Brad Hughes President and Chief Executive Officer
Ginger Jones Senior Vice President and Chief Financial Officer
Rod Lache Wolfe Research
Anthony Deem Longbow Research
Christopher Van Horn B. Riley, FBR
Call transcript
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Operator

Good morning, and welcome to Cooper Tire & Rubber Company's Third Quarter 2018 Earnings Call and Webcast. At this time all participants on the call are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Jerry Bialek.

Jerry Bialek

thank joining and call everyone, morning, you the for today. Good Ginger President Jerry Executive and and Financial Bialek, is and Officer, our Officer. Cooper’s Hughes; Chief This our Vice Treasurer, Chief with I’m Brad Jones, here

Such control. our result materially related no future are statements forecasts from or on of Tire current financial hear Actual of Company. limited projections. earnings operations to has reports Company the with SEC. information & morning statements business management which factors on conversation Rubber risk today, forward-looking release this differences and the additional results Company’s included Information During a and in earlier may Cooper over forward-looking factors these the the and may file you we be on results issued in may and differ

During and updated this XXXX outlook. quarter overview call, as an our well provide we Company’s business of third the will operating as results, financial

Please slides link that Our information will a XX-Q later earnings with slides note these information reference the that release be GAAP the comparable included today. includes and measures set non-GAAP filed most financial to measures the the that reconciliation release in in directly include a to about The call. SEC summarizes measures. we news and of on this financial will linked a certain

session. a Following our prepared remarks, participants the question-and-answer call we for will open to

turn to over Brad. call Now, the I'll

Brad Hughes

outlook call results, overview with questions. May we'll at towards I and in Thanks, Jerry milestones quarter. After your in which detail. discuss that brief our and Day then XXXX on for you progress fourth everyone. our good will introduced greater a morning update our strategic our the begin will Ginger give third will you an of I take quarter Investor financial the Then

quarter profit $XX results third as operating results. million included XXXX operating profit margin signs began throughout remained industry challenging of the the of net the which talk improvement did let's Overall Cooper's tire of but XX% about third showing Now quarter of and sales.

benefit million also operating sales reserve reduction and a by you model, million. Consolidated our While that to the year core the unit compared profitability net was product just a from flat quarter. over than a last in provided to profit Consolidated improved to we $XX increased X.X% to included ago. quarter liability little better was outlook a volume our essentially $XXX

light total U.S. volume the X.X%. unit by the increased by industry vehicle while USTMA Our increased by X.X% increased X.X%, and

quarter strong in the outperforming the ended total we a industry September. the month note of on both Importantly, and the USTMA

on business nonstrategic exit brand distributor volume the from Our an unit had comparisons. private impact third quarter

USTMA have Excluding this as the industry as the quarter. well impact we would in total the outperformed third

quarter provide will deeper on our results. a Ginger dive Now third

Ginger Jones

you, $XXX million compared I'll the XXXX quarter Brad. $XXX third increase of an start quarter third were with sales Thank million Net financial with X.X%. review. our of in

in Third of compared profit or quarter of mix price or of with million of partially net XX% sales Operating $XX offset million sales was impact. and were favorably favorable XX.X% XXXX. $X foreign currency net impacted by unfavorable million $X net $XXX sales by million

other and operating the in restated the costs GAAP XXXX other of been of for Our U.S. out reclassify has accounting profit of changes a pension postretirement profit pension million result $X benefit as to operating and costs. benefit postretirement

manufacturing million of was costs $XX offset deck. and and higher factors, in Page which which X of was are the profit slide mix raw XXXX supplemental million Third of unfavorabilty favorable net from summarized $XX with on impacted costs. the $X same as million partially of quarter by material by period million price operating the resulting higher compared $XX of following

$X Coast compensation liability benefit was compared in related professional SG&A million to offset and the well decrease due higher included to which reduced new of profit and In million impacted in incentive by higher increased the by fees a lower West costs This million operating from a $X as the costs our distribution addition, $X was costs. costs. other costs prior product warehouse to year increase as freight

detail provide Now the the product me quarter. a on let bit liability in more costs

Cooper of This higher performed current adjustment product the reserves, product company including anticipated than million the benefit expense Based the case of XXXX. of same of which $X analyzes XXXX quarter fees claims legal reduced variables estimate a $XX well as the its liability the completed in and and that part resulted of quarter recognized was of the and the and benefit review pending product to a and developments monitors similar $XX as liability quarter Cooper third As In trends regular liability and claims expenses in liability in of third against product review likely product pending impact third the in in company. million activity liability review XXXX. resulted million a normal its anticipated in quarter on XXXX during third of XXXX. was of quarter activity

annual forward, historical around excluding expense compared run expect Moving annual an per in $X liability rate reduction these adjustments. million ongoing year product we our of our to

as X.X% index Our XXXX, the second XXXX on X anticipated. sequentially of of to from the third material the The XX.X% supplemental quarter the in raw raw more XXXX index of material Page slide increased of shown from quarter XXX.X quarter slightly third than XXX.X increased in deck.

was share million period income last compared million or resulted per share diluted net the same of year. for $XX with earnings quarter Third $XX $X.X which per $X.XX in

to Moving segment Americas start tire performance with the our I'll operations.

X.X% region decrease in in ongoing prior from and more the economic a partially with political a million unit by unit volume the segment volume of Third unfavorable lower million increased $X $X pricing offset decreased and of as quarter million experience $X currency foreign of impact. than increase America, volume continued result Segment mix in America sales unit of offset to favorable a which Latin concerns. by Americas net the year X.X% North

material of sales million or was $XX quarter or raw the of $XX production costs of profit net mix the million XX% higher unfavorable of was Third resulting from net million fixed of reflects to lower with which sales profit America. number managing $XXX reduce net adjusting of unabsorbed $X demand to unfavorability year. last period million as Americas the in same operating of tires due manufacturing higher impacted XX.X% costs well in price compared and as $XX million inventory in million to and well Latin by overhead as $X in as Operating

focused and have the reminder, capital As been have of Americas. units a inventory optimizing we in on very number reduced the working meaningfully

as higher of higher million operating cost and costs product decreased In $X to in just due profit described million addition, $X quarter. other the of liability

You can Americas deck. X of on profit our full the see walk slide the supplemental for Slide

third by sales and volume quarter currency of mix impact. with in compared of price of in quarter a X.X% segment partially $X in $X Now XXXX was decreased result turning favorable international to the operations, prior volume as the million of unit and $X million million favorable Europe. to decreased segment in unit volumes year our third foreign offset the net International of tire lower the both Unit and X.X% lower Asia

replacement volume market OE than by in more tightening. due X% credit offset was Asia was For the year-over-year but softness up to

have do some in conditions and the auto beyond As created in in quarter tire we driven by market OE OE the the softness weakness segment region. fourth we see that look the to economic

QX headwind tough Europe, up XXXX and unit OE likely our our moderate OE see volume sets sales Asia third-party Additionally, strong prospects to in softness in We increase good a volume about vehicle combined feel QX our reflected OE the we in our our guidance. we long-term XXXX as the comparison is will with year-over-year. which base. diversify a continue in In unit to customer business continued

favorable than lower year an were shipments in in U.S. was million our driven results quarter the costs with to year we production However, this sourcing continue price operating net to as profit compared costs higher from $X results of in from offset Serbia the and of million other million This manufacturing of $X mix. to and of execute well The near lower the as the quarter. as a $X million period International of last raw $X partially was of $X third due improved lower with favorability by ago. segment $X to by material compared more costs strategy. million higher same million operating resulting offset by These million levels $X

You can slide segment supplemental see the International for deck. full profit the of X walk on our Slide

meaningful expense in turning Now, due the improved in of decreased is $X result items, pension funding million prior with year. XXXX to have some pension This our year-to-date to down losses actuarial levels. from seen we expense the largely amortization corporate a of reduction

this contribution on was the for to in with able appropriate savings in million of tax XXXX. more funding Along our U.S. tax fully be pension rate. at $XX in continue We third the return million rate book, and XXXX. approximately as this plans was quarter the the effective where focus on contribution cash results third deducted higher our to XX.X% quarter funding XX.X% The the XX% to plans the with compared to discretionary of XXXX $X plans

more U.S. and approximately result recorded items The third rate in quarter tax tax. the related million XXXX as quarter the discretionary the of of of contribution items XXXX. to of transition statutory in discrete reform benefit rate the was net a approximately of tax These lower expense $X approximately $X than through-up quarter. offset million of of U.S. to includes a the by blended benefit related XXXX the the $XX million tax income expense include $X the tax This third pension million

based the jurisdictions and is the earnings rate in on which forecasted annual for company tax tax effective Our operates. rates various

We our later rate and More in remaining capital on a full-year at will plans. flow XX, our with in support ongoing taxes available to global estimate to needed XX-Q with to capital modernization, and continue strategic equivalents with appropriate capital September spending the cash $XX continues compared detail level Cash the on focus cash in actions. demand, environment Capital that $XXX We form capacity to aligning third XXXX our on of $XXX align be actions growth at levels, evaluate including managing current million tax while other Cooper today. range the and the XXXX. XX, in filed production be prudent the addition evaluating improvement to working SEC in were between quarter expenditures XX% investments also will is the effective inventory million XX%. to million. XXXX the were and transformation, continuously September automation initiatives mix

Our on activity. four full-year capital fourth for million. $XXX expected invested between quarters Return quarter of $XXX million and impact in for was remain XXXX X.X% expenditures tax unique excluding the capital range the a trailing XXXX

of price XX,XXX $XX.XX per during under to $X of quarter shareholders, for dollars repurchased an third to the just capital return Moving approximately average million share. shares at were

XXXX, As XX, of $XXX September remains million $XXX authorization. the of million

supporting We distributed support than Cooper Additionally, capital quarterly turn and goals. flows I'll margin repurchase roughly are partnerships, our potential cash, sufficient to those as cash regular existing to support $X growth our million improvement organic allocation ongoing and our to call priorities. commitments, dividend and initiatives, funding Cooper define and in share acquisitions dividends. believes more and our Brad. capital priorities now leverage the back

Brad Hughes

of Thank some strategic our Day on you, May. Ginger. I'm introduced Investor at we and going in to initiatives milestones provide update an the

the we had right footprint this locations. you we technology have a a we cost were importance confirm and of our component competitive production and capabilities, may the line optimizing and that that At that of discussed right right are with structure, global in in and that the we of time our the ensure review needs. capacity assessment we First, completed capabilities our production the recall to conducting Asia

with analysis We also said that footprint. underway European our well the of we were

global to Tire cost Tire Melksham, present competitive proposed have Tire is it card that is and Cooper's tire light analysis the the light for update within process is consultation vehicle large. at production is We its a to these is Cooper in to site subject competitive Cooper or completed Cooper's economically feasible tire best this highest that CTE expand not England production not to industry network facility It under cost or form manufactures the plants tire Europe Europe's is it months. meet entered sourcing success The will is its outcome view year meet mean to manufacturing from which vehicle leaving placed production ensure explore other per CTE Melksham. to tires changes This CTE's phased needs. employee light in ceasing XX just CTE and Cooper presently or vehicle vehicle has and environment. approximately tires not consultation CTE Europe Cooper tire facility in a does XXX The goal $X production needs. change Melksham a the result consultation, related could future is million tire and in over positions of Subject in global of Melksham. out ceasing light period being across

In sales and intends and motorsports business. tire fact, Center, under proposal headquarters, and Tire CTE European materials continue Melksham motorcycle Europe's Technical to to and home is production marketing the there Cooper offices,

For consultation with contemplating process required significant representatives. a calls employee consult UK a background, is for to the reduction companies in that workforce

and will and consultation longer, minimum more consultation must period, number typically During There total of a has the course minimizing reductions, explore statutory been any is provide or consequences ways three the could complete, CTE of the When take process we to information of of the is eliminations. a process. mitigating all XX-day two reducing company following workforce it employees shared this avoiding of consultation ensure affected and the job analysis details. compulsory is but months.

In to footprint we the track. to addition milestones provided review

The highly first attractive was product launches. new

Discoverer for which is trucks successful one our has new and Our been SUVs tires. ATX most of prime the line line our example. a product former light replaces ATX This

outstanding the the selling and family ahead line industry a year and the been launch planned date We far of leading proud of this mid-June new to the performance pulled product than strong. has are ATX mileage new delivers. more very so by We

to line consumer product and to been beginning see feedback. are We this great receiving the has the new response

We of look quarter truck continued success this to momentum segment overall of our forward in launch. growth light and strong this of seeing category ATX during Our the market. the was saw part the

you of product Consumer our and development example True of using was by Discoverer The the magazine This our great tractor launches recently is consumer ranking. Reports that success process. Another North encourage view winter premium was our product ranked tire. product we True created lead to North

time have Bird the for Day. milestone products buses. brand long on great Blue of thrilled announcement a brands recent truck Investor we we be around we have Another of Both Bird working together selected new was launching Since strong are Cooper and was and brand standard have Cooper to Cooper in exceptional radial as of truck our which look reception to school tires Blue bus launched and and equipment been performance the bus the that line told and you this history partnership. producing our radial very seen our including

relationship about are about to we yet our strategy automaker a European we share While position and to North opportunities. premium in OE explore progressing America, more very in details not feel is a good additional continue the way our with

last also Day Year-to-date from business. international and margins over XXX doubled improving points our operating we compared about Finally, international operating more talked by profits basis improved than margins when at Investor have to year. our have

time a the to highlight we Senior Latin has to Ceneviz economies This of of International. As of international he Luis he performance. In drive continue President leadership that promoted and advantage in the of focuses results we to and Asia. demonstrated are President scale take operations oversight higher International Vice new America been business Luis changes to drive who good on in has leader is to segment. and role, engagement a business. employee team performance we is our can our and this has organizational Europe, in process identify and improvements, implement operating confident some position

been to who of make then effective in well. the to staying with Cooper as in Manager named on the growth Alan sincerely as appointment to is XX of equipment Allen extensive, contributions he a We grow retirement instrumental retirement with his years. all Vice Yang. for business with planned been his for through We including contributions. of experience special Allen a President highly has to part-time Tsaur, experienced back and Asia. advisor We business also and executive want He to is look with industry Cooper leader is the leading will coincides business. is continue was the original Alan we Asia. Asia of General transition welcome as want thank me. an Alan OE His our beyond the tire an He forward has and at

our Walker will Katy of Brian Dickson brands may to built seen you Directors. and to exceptional have have Both Additionally, bring press unique are our and have been who leaders announcing Board that strong named experiences insights and release Cooper.

as have are our team We opportunities to we had address Katy refreshment on executives our interest have many grateful an our are delighted Brian express to talented along joining and with in of Board. Board our business in and

are materials quarter. talk and than gears shift our more industry still risen expected. fourth outlook Cooper for raw somewhat have let’s dealing and Now the about with that the

In fact peak level for to we of to quarter. returned near expect levels costs although fourth them have the XXXX, out

which the be quarter outlook Also XX% with China represent and enacted tariffs industry index to assumes material along in industry. segments offset certain latest tire light to peers a these costs. are price full higher our increases X% with tires on fourth other vehicle with higher partially they on ago. and compared proposed that potential same of several price the up Our in of to and in imports in U.S. raw increase from materials about increases have is markets certain quarter line the in the We tariffs Cooper have announced risk. some implemented been a year

at disrupting tire discussed Investor landscape. our is the we in Day, industry consolidation distribution As

represents for a growth to continue Cooper. opportunity We this believe that disruption

very In program. favorable to fact, seen response conquest a dealer have our we

value of shop sale which they efforts and available some Obviously, strong a Cooper loyalty, volume, shareholders. where exciting want Our consumers it competitor new take attractive of and one to faster a actively our we at long-term new to and consumer continue global this more points is We tire impact making will fully brand new dealer tires cadence. to enrollments have to great launching will more key but proposition has year-to-date our great than time continue. that that for delivers products doubled adding be a Cooper that with our an are strategic are strong to goals. believe value

For the of unit our expected economic is regions and volume by the by to driven political quarter, fourth declines the volume this be we but U.S., other in offset in continuation expect challenges. growth growth

We just raw from higher an I tariffs discussed. costs impact expect in continue to material which

offset partially some price costs. We increases have to of higher these implemented

we include we in of which of annual result, XX% profit to close the a quarter from operating and committed low-to-mid fourth invested costs. As the to XX%, financial formal unit what We remarks. be third capital for product excluding remain XX% That’s the benefit digits all return would operating achieved to to targets single to quarter XX%. growth margin expect lower our have our liability volume we in on five-year

move your Let’s first take onto will you question? questions. Operator, please the

Operator

Thank you.

The Instructions] ahead. We begin question go question-and-answer [Operator will Lache from the comes with now first Wolfe session. Please Research. Rod

Rod Lache

until some bankruptcy them base they’ve other to in I for had quite for everybody. that increases number. to questions. Good was looks reported you payable big headwind, of the hoping that that $XX an sounds out us on in the you million a morning some they’ve million I up understand the as been lost U.S. payable Tire in you share been that couple like happening the it vis-à-vis but brands you what’s and it of can positive so in mix, that and and a are seeing a ATD side One help got filling some market label guys which $XX was like on alluding business has is, is quarter Cooper their private depending now

a negatives maybe can the meaningful a how some how you big was and you? deal ago, for hoping was I ATD year of quantify saw, that that is So you positives

Brad Hughes

we in a and on had had we distributors me overall as the the total full remarks industry to of earlier you ATD ahead the of in start non-strategic a move we question industry And at in the said volume overall that with alluded then perspective again, the we and performance. performance private which good September, business market continued beginning to USTMA U.S. let from felt prepared have quarter. that In the to year-over-year total the third the both like and just of some volume taking of share label wholesale exit But ahead I we to quarter as were USTMA on mix the the the regard Well, a portion some are the out think quarter equation question. very the we on the for quarter both performance and with - we the was around of during we'll actually our

share around our we in the looking point come market the see the conquest we the conquest in we've to to seeing like that again a So to note, that that ATX. that believe nice contributed strong the would at that way be move to say as the us program, third seen we've portfolio, that. at not program on the The making that the feel of as distribution of and place, other wholesale and we're the going the some saw I ATD, part an ATD. we product and with improvements introduction opportunity put landscape mentioned mix, during in changes changes last for to improvements Along and we to just We of but the specific of to just had market we're and overall quarter to that ATD been you benefits has gain very it's been market, starting made you one the mix. we're we've certainly that

the of perspective, the to a from we good in look the We're third segments the our the of at new. again we've that see and strength performance felt well ATX, key in, the beginning to done about now that of the quarter. so historically some part you very share in because market previous If strength relative

Rod Lache

the ago, this digit or is like you it of Can yours seems percentage just business pretty big ATD move? a single tell year was a us like customer

Brad Hughes

going There's know, they’ve been years least, it broader not provide it strengthening. for taking at a wouldn't, been customer and few us, for for you doubt on for as that the a too ATD I and to so ATD taken given specifics we're good opportunity a customer years to a ATD us several but advantage customer we're is to has of. at that an be disruption conquest but proven don't I focused opportunity the no be place the that's has want good on

Rod Lache

this, maybe the as into quarter, more Got it little just is side. net label vehicles of private the balance your a provide seeing on opinion affecting lot and imports and a that tariff secondly, look affecting a net could also you the some related color in price, of if mix you're of as the fourth parts? in as negative? competition on a bit commercial tariffs And or commodities, your it's light actually to positive you well moving and the Presumably

Brad Hughes

the especially that negative net in September X, tariff term, potential could think XX% in Yes, only that's there's the place XXX neutral incremental or place the or in now, you've not as change, if tariff a separately component I and from January on went there. a to don't out at the of automotive components XX a things trigger to got that it's whether or that it's then longer little positive in declare tariff given one early right

So things you're a of lot going right, on. there's

place. forward look already we the fourth is the into XX% quarter, As in have we clearly

a the we will relative industry in fourth like move terms into been that headwind sticking. although pretty stabilizing and we year that third think first looks will from it's a be materials quarter ago raw pricing the to the the see into we as an as of come market quarter the successful are fourth have We quarter

our seems that partial to offset increase it's been these some to position it forward. perspective, And fourth costs to we're that the of right successful quarter. the have quarter in and see industry and we're So that with going increases fourth that costs with and from on continue a in as believe is frankly can certainly industry the if risks we we seeing headwinds respond the to increases look price our a including incremental tariffs still is price now, where as cost in

And perspective opportunities and do will supply that so still but the price. industry a to demand be from we a we'll position in continue be to monitor market for disciplined is around and facing, to

Rod Lache

thank you. Great,

Operator

the Research. Anthony question Longbow ahead. Please go comes next Okay, from with Deem

Anthony Deem

everybody. Hi, good morning

Brad Hughes

Good morning, Anthony.

Anthony Deem

materials Couple X% like Thanks me questions million, we Raw price headwind $XX the you around mix. looks questions and materials price calculating quarter as the over quarters, close XXXX. a much $XX for benefit price has increase that's seen headwind you you mix might gain four know the since announced million to four it overall so $XXX assume here. I'm Cooper mix raw that quarters. taking of a as my pretty million When first next in to price of half next the

backdrop? share do looking Cooper estimates see and the raw XXXX material, consequences particularly the as XXXX a and if recoup in XXXX to we you sound other market any might manufacturers Americas that to that's is cover impacts trying So the wondering, the headwinds you recent reasonable case here the these so fact the if only first as I'm from Cooper, to and to with get just be negative

Brad Hughes

market feel going of of few in Yes, said think quarter, doubt pieces looking so a start point no opportunity address the that competitive of say, we the feel remained market I will for at but quarter, tailwind - facing the discussion a continue this with going continue for started U.S. mix third in we're time. as the material our there's like us see we see feel that to and we we at and price fourth us. market volumes that And have to has of we've We terms that well We here, momentum growth move like been It's the forward. a to positioned with plan to about I'll pricing to that. at there's in relative forward there believe that facing do mix we part in margin the still raw end pricing to we in like, no. our we very and that do our We we're do as cost.

think to I raw we so And price material mix incremental be or offset to that increases can tariffs some an of those continue described. just

Anthony Deem

Okay.

So mix price is the offset some this with of pretty raw of there? headwinds confident to it and of appears recent that maybe round can material you you’re it the prior fair successfully year current dynamics view the cycle price your increases say

Brad Hughes

the had very, Well, the was that a that Whether say can of sure I to fourth you or that would the it. stabilize, that we've what around we've implemented we to approached saying I'm that not quite given terms that way I'm been of are that we still not all - mix. in it's historically we're unknown quarter implementation we accurate. that's that I the got think and said Tariffs and going for compare mean, that opportunity materials raw to on big a X% unknown. the it's to way done we've that the are of was offset up sticking going

a little the all there, very be a is going we're of given that premature. So able offset unknown that bit out to prescriptive be to saying to I lot think of

Anthony Deem

settling rate wondering said guys and just were XXXX send I’m year it range so, so quality and the liability product you going like or thank see such run playing reasonable And liability a beyond, and We've what's not call million product you million the maybe Okay, been that’s expectations in product accrual helping, expectation very $XX better XXXX it think beyond? so $XX for risk and seems forward? guess $XX to helpful, million then, why is higher and XXXX let's last I to you. for I the and

Ginger Jones

Ginger. it’s Anthony Hi,

we two said product about the adjustments. you significant the We good each have liability as accrual based on adjusted product talked and including of pretty years, and improving factors some in had ongoing last tires that As liability. in on our you trends We at appropriate we've had very as said over quality we've and look the year basis time. two

today. estimate that's best million guided have you $X down think ongoing XXXX of we think We our be about you for costs from to the will as and XXXX that as

up appropriately move today on our but severity the think we've think for liability forward. based for accrued and what best to given going expense the guidance and down that's is and cases of course cases, we product we're going we Of

Anthony Deem

just the stood the of and you about then from July, seems last volume all can quarter, question If and it throughout me. September August, Got talk like September. positively. it one cadence possible, at out

a October feel if versus rate price there and wondering based normalized might increases you in of improvements pre-buy sell very Your or much or X, in not of Thank I'm more announcement run was a first have bit of in? July September. on week little taking like really been my sellout, terms the was August September the the questions. for

Brad Hughes

month. Sure clearly with would strong sequentially, Anthony, September very a we exited I

price into that we've may order difficult but say that to exactly little a looking what implemented moving we ahead. look with momentum and we've see a month reduction I I good Now order as being It's to that of - to have September discern we pull quarter. regard come because our what affected feel continued price as as and moved the that we're I it of look would book frankly not bit come September, exit of by rate have the way and always the we will still at at in the into fourth at and it the that if strongly about October, book increase,

Anthony Deem

you. thank Alright,

Operator

from [Operator Chris question Horn with Instructions] The Please B. Riley, next FBR. comes go ahead. Van

Christopher Van Horn

call Good on and morning, the solid thanks for taking my execution. congrats

Brad Hughes

Chris. Thanks

Christopher Van Horn

your terms you private where play over you timing from see of could in months away quarters however kind that or of coming shift that now? of label highlight So we're the the and at

Brad Hughes

and the in transparency from through indicated prior the non-strategic are the component exit the brand about private really full that have we and through wholesale private, we of we're largely in quarters Yes business.

get we next we've into couple the been back of last As what working well from way our quarter-by-quarter comparisons through year diminished should on be years.

through something largely we Chris into year. as we're spending think I be get it shouldn't that and we it's So time next that on much

Christopher Van Horn

is then, share and new the a and Cooper heavy win, and truck market looking winning good from win a Bird sounds you're for the great Roadmaster branded conquest perspective? Blue imagine the business I taking Okay, how tires pipeline and was

Brad Hughes

then the and Cooper and competes the the can we some in, had going with is that new and to with meaning we to folks Roadmaster what it and the compete of it's the that. of that the market and brand do bus successfully the The was trailers, fleets and lot in looking good. market of doing in OE, radial still very hoped are we so their build on it that looks segments segment It owner-operators like truck competing

Christopher Van Horn

did come kind a just and competitive win and follow it? conquest Okay, was was and about that Blue Bird how got how again a of on, it so

Brad Hughes

caused that product and select terms happy outcome Well, We've it the it's and over all team that offer. we're the backs and the contract was to I'll a and up that so service about the we ongoing the this yet Bird accounts going and they in first got forward business that of be that way business - the that product great say able to very a us that relationship account Blue way, got well. to will the way of it service incumbent we've as of

Christopher Van Horn

the very is very Okay, just we Board about I to have product you seems like little and we campaigns doing Thank got are traditionally you've the what execution was you marketing continued be how been just you spend about more it going members, a curious got And marketing forward, advertising been new see wondering, guys experience of lot to yourselves. more how in strategic of then a it. market or it just branded I'm going past? going or aggressive much. think they've bit

Brad Hughes

as owning is become there on consumer on the consumer in a making many is our going and are buying in doesn't way process as organization given tires becoming more they think the transition decision the for we Well, the I translate it's necessarily consumers That clearly our focused tire and lot the we increases are the because in focusing investments us area buying it's advertising we in effective that and finding a significant in effective very are into think of in digital for spend industries. process.

to you'll some surprise selling, over so still that we've still not will regard, make model to may investments I'm that we expenses. see a the anticipating be- some sure strategic time, will administrative right anybody that's business going see got And our and shift you're anything with see general, you be including going to with but

Christopher Van Horn

if how searches is up just channels, from progressing you one last of in perspective? percent online can curious general that and online comment, from things and on the is Okay Tire from show just on a then and other we're like quantify Rack more a me how last just sales channel seeing that you progressing - and more or

Brad Hughes

General from mix perspective, a industry, for about of we seeing our the on We're I we're growth the presence very think base is relatively on out the base as but a seeing small lot some good good small average customers key, feel online there. increasing on point selling we're of products those very relatively working from through products. with the and extremely a of and it pleased

Christopher Van Horn

Okay, the time. great. Thanks for

Brad Hughes

Thanks Chris.

Operator

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

Brad Hughes

as we anticipate look to excitement the you execute Cooper We call a for on is strategy our in thank being the of updating to at we and you level on grow we forward with that continuing the the close to much want not Okay, today. progress months. coming for -

reach to Thank As very out further with any or Jerry questions comments. please you much. always,

Operator

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

disconnect. now may You