Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you expand on the investments in sales execution and the potential lag of return on those investments? A: David Duvall, President and CEO, explained that the company is focusing on increasing sales to leverage operational improvements. They are investing now to grow the business over the next 10 to 12 months, despite a typical lag of 12 to 18 months for returns. They are also exploring opportunities for earlier business gains, such as mold transfers or working with troubled suppliers.
Q: How should we think about greenfield opportunities versus growing wallet share, particularly in the truck and powersports sectors? A: David Duvall noted that growing wallet share is a significant focus, with many wins coming from existing customers and new programs. They see opportunities to convert truck interiors to thermoplastics and are in discussions with customers. Existing relationships make these sales more attainable, as they are already integrated with these customers.
Q: Can you provide more color on the financial outlook, particularly regarding the Volvo transition and seasonality? A: John Zimmer, CFO, stated that the Volvo transition is expected to impact revenue by around $10 million this year, with the majority affecting next year. While seasonality has returned, overall demand is slower due to economic factors. They anticipate growth with customers as the economy rebounds, but the back half of the year remains softer than initially expected.
Q: What are you seeing in terms of M&A opportunities, and are there any specific geographic areas of interest? A: John Zimmer mentioned that they have hired an outside banker to focus on buy-side opportunities and have identified targets. While the market is currently slow, they are actively pursuing acquisitions that align with their strategic goals, particularly in the Southwest region.
Q: How is the company managing its cash generation and what are the plans for capital allocation? A: John Zimmer highlighted that the company is generating strong cash flows and has no net debt. Their capital allocation strategy includes investments in organic growth, share buybacks, acquisitions, and net debt repayments. They are disciplined in their approach to acquisitions, ensuring strategic fit and financial thresholds are met.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.