TimkenSteel Corporation (NYSE:TMST) Q2 2020 Earnings Conference Call - Final Transcript

Aug 07, 2020 • 09:00 am ET

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TimkenSteel Corporation (NYSE:TMST) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the TimkenSteel Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the call over to Jennifer Beeman. Thank you. Please go ahead ma'am.

Executive
Jennifer K. Beeman

Thanks and good morning everyone and welcome to TimkenSteel second quarter 2020 conference call. I'm Jennifer Beeman, Senior Manager of Communications and Investor Relations for TimkenSteel. Joining me today is Terry Dunlap, Interim Chief Executive Officer and President; Kris Westbrooks, Executive Vice President and Chief Financial Officer; as well as Tom Moline, Executive Vice President of Commercial. You all should have received a copy of our press release, which was issued last night.

During today's conference call, we may make forward-looking statements as defined by the SEC. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in yesterday's release. Please refer to our SEC filings, including our most recent Form 10-K and Form 10-Q and the list of factors included in our earnings release, all of which are available on the TimkenSteel website where non-GAAP financial information is referenced, additional details and reconciliations to its GAAP equivalent are also included in the earnings release.

With that, I'd like to turn the call over to Terry. Terry?

Executive
Terry L. Dunlap

Thank you, Jennifer, and thanks to everyone on the call for joining us this morning. The second quarter presented extraordinary challenges to our country, to our customers, and to our company. Our employees were exceptional and facing the challenges confronting TimkenSteel in this environment.

A few highlights for the quarter. First, we operated safely. Our OSHA recordable rate was at an all-time low for the first half of the year. In addition to our steadfast attention to operating safely, our employees have been diligent in following the COVID-19 for cautions, we put in place to maintain a healthy work environment. This diligence and great teamwork across the company allowed us to maintain uninterrupted service to our customers. My sincere thanks to the TimkenSteel team for their ongoing focus on staying safe and watching out for their coworkers every day.

Second, we were able to deliver positive EBITDA and cash flow despite extremely weak demand. Last quarter, we shared some of the immediate cost reduction actions we introduced on the impact of COVID-19 was becoming clear, including reduced operating schedules, rolling furloughs for salaried employees, reduced compensation for our Board of Directors and leadership team and a suspension of our 401(k) matching contributions to name just a few. These incremental cost reductions, combined with other pre-COVID cost reduction actions and systemic working capital management initiatives contributed to generating second-quarter EBITDA of $5.7 million and second-quarter operating cash flow of $16.1 million.

As expected demand in the second quarter fell significantly as a result of customer plant shutdowns, order cancellations, and delays. Second quarter shipments of 108,700 tons represented the company's lowest