ASV Holdings, Inc. (NASDAQ:ASV) Q2 2018 Earnings Conference Call - Final Transcript

Aug 09, 2018 • 04:30 pm ET


ASV Holdings, Inc. (NASDAQ:ASV) Q2 2018 Earnings Conference Call - Final Transcript


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Good day, and welcome to the ASV Holdings, Inc. Second Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Andrew Rooke. Please go ahead.

Andrew Rooke

Thank you, Justin. Good afternoon, ladies and gentlemen. Thank you for your interest in ASV, and welcome to our second quarter 2018 earnings call. Joining me on the call today is Missi How, our CFO, who will take us through the financial results for the quarter; after the overview, market and strategy update from me.

Today's call is supplemented by the press release issued earlier this afternoon and is also accompanied by a slide presentation, both of which are available on our website. Also available on the website and in the release are replay instructions for a recording of the call, which will be available until August 16.

Please refer to the first slide regarding today's discussion that will include forward-looking statements and references to non-GAAP measures. We ask that you review these statements and refer to our Form 10-K for 2017 filed with the SEC for further guidance on the many risks associated with our company.

So I'll begin with Slide number 3 and an overview of the business. Today, we reported $31.9 million in sales, $2.2 million of adjusted EBITDA and earnings per share of $0.03, results that were below our plan and which Missi will discuss in detail later. Overall, the quarter reflects a strong comparative prior year quarter for our undercarriage sales from a year-over-year difference in the timing of customer purchases together with the impact of several market headwinds, but also includes positive progress on our strategic actions required to deliver on our long-term strategy, such as adding new dealer rental locations, growing our rental business and operational savings from our aftermarket parts center.

In the second quarter of 2018, we added another 17 dealer rental locations in North America, taking the total at the end of the quarter to 265. This increase in distribution helped us record our fourth consecutive quarter of increased sales of machines and year-over-year quarterly machine growth of 9% in North America and 4.8% overall.

We are also making progress with our stated goal of expanding into the rental channel with 15% of our machine sales in the quarter, which is an important segment, up from a very low level in the comparative quarter a year ago. The second quarter was also our first full quarter of operating our aftermarket parts distribution center out of our facility in Grand Rapids. The results confirmed that our expected savings compared to last year are annualizing on track at approximately $1 million, which will be reflected in our SG&A cost going forward.

As I mentioned earlier, there were industry-wide challenges that impacted our second quarter performance, and we see these continuing for the balance of the year. The market price of our materials, especially steel, has reaching sharply from the start of the year. This demanded a