Mayville Engineering Company, Inc. (NYSE:MEC) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 10:00 am ET

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Mayville Engineering Company, Inc. (NYSE:MEC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to Mayville Engineering Third Quarter 2019 Earnings Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to introduce Mr. Nathan Elwell, Investor Relations. Please go ahead, sir.

Executive
Nathan Elwell

Thank you, Claudia. Welcome everyone and thank you for joining us on today's call. A few quick items before we begin. First, please note that some of the information you will hear during this call will consist of forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended. Such statements express our expectations, anticipations, beliefs, estimates, intentions, plannings and forecasts. Because of these forward-looking statements involve risks, assumptions and uncertainties, our actual results could differ materially from those in the forward-looking statements.

For more information regarding such risks and uncertainties, please see our filings with the Securities and Exchange Commission including our registration statement on Form S-1. We assume no obligation and do not intend to update any such forward-looking statements except as required by Federal Securities Laws.

Second, this call involve discussion of certain non-GAAP financial measures. Reconciliations of these measures to the closest GAAP financial measure is included in the earnings press release which is available mecinc.com.

Joining me on the call today is Bob Kamphuis, Chairman, President and Chief Executive Officer; and Todd Butz, Chief Financial Officer. First, Bob will provide an overview of our performance, then Todd will review our financial results and guidance.

With that, I'll hand the call over to Bob.

Executive
Bob Kamphuis

Thanks, Nathan. Good morning, everyone, and welcome to our third quarter earnings call. As you saw in our earnings release, our results for the third quarter are indicative of the changing market environment that has evolved rapidly over the past 60 days. A combination of macroeconomic factors that our customers led to numerous near-term changes to production schedule from one -- many of our largest customers. These demand changes impacted both the legacy and former DMP businesses and were particularly evident within the agricultural, construction and heavy and medium-duty truck market.

In addition, the UAW [Phonetic] union labor issues in the automotive sector added an extra layer of complexity that further impacted production schedules. The recently concluded GM strike which lasted approximately six weeks had a material impact on our medium-duty related business in particular. Not only were our production schedules impacted, there remains uncertainty today regarding how quickly we will return to pre-strike schedules.

Needless to say, we're very encouraged that this issue has been resolved and anticipate more visibility to return to our production schedules in the near future. Likewise, the more recent union labor issues that some of our heavy-duty truck customers have had an impact on that part of our business in October. Although, it appears the volumes lost during the short-lived strike will be made up during the fourth quarter, these situations, can't be disruptive to efficiency.

The