CompX International Inc (CIX) 2002 Q1 法說會逐字稿

Please stand by. Good day, everyone, and welcome to the CompX International Inc. 2002 first quarter call. It is being recorded. For opening remarks I will turn the call over to Brent Hagenbuch, President, and Chief Executive Officer. Please go ahead, sir.

請稍候。各位早安，歡迎參加 CompXInternational Inc. 2002 年第一季電話會議。本次會議將進行錄音。開場致詞我將把電話會議交給總裁兼執行長 BrentHagenbuch。先生，請開始。

Thank you. Good morning and welcome. With me today on this call are David Bowers, Vice Chairman, Chief Operating Officer, Stuart Bitting, Chief Financial Officer, and Darryl Halbert our Chief Accounting Officer. Before we begin the call this morning, I'll read the SEC suggested disclosure regarding forward-looking statements. Any forward-looking statements made are based on management's belief that such statements are reasonable using currently available information. CompX cannot give any assurance the statements will prove to be correct. Such statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Some of such risks and uncertainties are sent forth in CompX's recent SEC filings and press releases. CompX assumes no duty to publicly update such statements. All right, in the first quarter, CompX delivered earnings per share of 9 cents. I am pleased with our improvement over last quarter. It is the result of our previous restructuring in Europe and the extent this productivity actions we have taken at our North American facilities. There were a number of positive actions and developments during the quarter. Highlights include, One, additional progress in nearly every operation in the productivity and cost structure. Two, positive results from our continuous improvement initiatives in product quality, on time complete customer delivery and workers' safety. Three, continued improvement in working capital, driven by inventory management and cash flow improvement in general. Four, new business gains in improving market share and finally five, promising new product launches. During the quarter, many of our customers, particularly those in the office furnishing industry, experienced continuing softening in their markets. This continues to depress our sales levels It's tough to predict when those markets will eventually turn up. The progress we are making in honing our cost structure, gaining share and developing new products is intended to drive profit improvement in the short run and put the company in good position in the long run, when economic conditions improve. With that I will turn the call over to Stuart Bitting our CFO, to explain the first quarter financial details.

謝謝。各位早安，歡迎各位。今天與我一同參與本次電話會議的有：副董事長兼營運長 David Bowers、財務長 Stuart Bitting，以及會計長 Darryl Halbert。在我們今天早上的電話會議開始之前，我將宣讀美國證券交易委員會（SEC）建議的、關於前瞻性陳述的揭露聲明。任何前瞻性陳述均係基於管理階層的信念，並使用目前可得資訊，認為該等陳述屬合理。CompX 無法保證這些陳述將被證明為正確。此類陳述涉及風險與不確定性，可能導致實際結果與陳述中所預測者出現重大差異。部分風險與不確定性已載於 CompX 近期向 SEC 提交的文件及新聞稿中。CompX 不承擔公開更新此類陳述的義務。好的，第一季 CompX 的每股盈餘為 9 美分。我對我們較上一季的改善感到滿意。這是我們先前在歐洲進行重整，以及我們在北美廠區所採取之生產力提升措施所帶來的成果。本季期間出現了多項正面行動與發展。重點包括：第一，幾乎在每一項營運中，於生產力與成本結構方面都有進一步進展。第二，我們在產品品質、準時且完整的客戶交付，以及員工安全方面的持續改善計畫帶來正面成果。第三，受庫存管理與整體現金流改善所帶動，營運資金持續改善。第四，新增業務帶動市占率提升；最後第五，具前景的新產品上市。本季期間，我們的許多客戶，特別是辦公家具產業的客戶，其市場持續走弱，這也持續壓抑我們的銷售水準。很難預測這些市場何時最終會回升。我們在精進成本結構、提升市占率以及開發新產品方面所取得的進展，旨在短期內推動獲利改善，並在長期上、當經濟情勢改善時，使公司處於有利位置。接下來我將把電話會議交給我們的財務長 Stuart Bitting，請他說明第一季的財務細節。

Thank you, Brent. Good morning. We had expected that the economy would have bottomed out in the first quarter of 2002 and though not expected to grow by any significant degree, at least keep from falling further. This has not been the case. We have seen further erosion since the fourth quarter of 2001, especially within the office furniture sector and indicators are still not clear as to when stabilization, let alone a recovery will occur. Even though the economic conditions have precluded CompX from achieving our desired level of financial results we have been successful at curbing erosion in our margins through cost and infrastructure management. Now let's take a look at our first quarter, 2002 results. CompX delivered as Brent said, earnings per share for the first quarter of 9 cents. And this is a 28% improvement over adjusted fourth quarter 2001 earnings per share. And it is indicative of the impact of our cost reduction actions that have been executed. We reported the net loss per share in the fourth quarter 2001 of 9 cents, due to certain one-time items. Excluding the one-time items, and the impact of the accounting change in 2002 for goodwill amortization, adjusted fourth quarter 2001 earnings per share would have been 7 cents. As compared to the first quarter of 2001, earnings per share declined 63% as a result of the broad economic downturn. Net sales of $48.6 million for the first quarter improved better than 3% as compared to the fourth quarter of 2001, but declined by 18% as compared to the same period last year. First through the fourth quarter 2001, CompX security products net sales grew 12% or $2 million primarily driven by new business development and less dependency on the office furniture sector. However, the combined CompX Waterloo and CompX Regout businesses which are more dependent on office furniture OEM's showed a slight decline of about 1% versus the fourth quarter 2001. Even so we are gaining new business within the office furniture sector at the expense of competitors resulting in share gains for CompX. All business segments posted larger net sales declines versus the same period last year as a result of the continuing broad economic decline. CompX Waterloo and Regout posted a decline of 22% while CompX security products declined at half that rate. Our cost reduction efforts have helped to protect our operating margins. Throughout 2001, we experienced the declining margins due to the rapid sales falloff from the weak economy. Operating margins for the first quarter 2002 are at parity with fourth quarter 2001 adjusted operating margins. Operating income for the first quarter of $2.5 million declined by 53% as compared to the first quarter 2001, but was 2% better than fourth quarter 2001 adjusted for one-time the items and goodwill amortization. We will continue to drive our infrastructure cost improvement agenda throughout 2002 and strive for more margin improvement. And as Brent mentioned, aggressively pursue new business development in conjunction with new product introductions to improve the top line. Now let's turn to the balance sheet and look at working capital and debt. As I said in previous calls our key matrix in this area are day sales outstanding, days payable outstanding, days in inventory, cash gap, free cash flow and debt to capitalization. We continue to make real progress in the area of working capital management. At the end of the first quarter we improved our cash gap which is simply days sales outstanding plus days in inventory less days payable outstanding by 1.8 days as compared to the end of the fourth quarter 2001. This had a positive impact on cash flow of almost $1 million in the quarter. Improvements in days in inventory and days payable outstanding were the key contributors to this performance. CompX has reduced overcall cash gap by over 18 days or 17%, since we instituted our metric-based management mid year 2001. And we believe that we have additional opportunity for further improvement as the year goes on. CompX free cash flow which we defined as operation cash flow less capital expenditures was $800,000 for the the first quarter,and this was $2.6 million better than prior year. Capital spending of $3.7 million was about 2% lower than the previous year. Additionally, our cash conversion efficiency, which is free cash flow divided by net sales of 1.7% was 4.7 percentage points ahead of first quarter 2001. We are clearly managing cash flow well and ended the quarter with almost $33 million of cash in the bank. Regarding debt, CompX historically has maintained a low leverage position in our debt to capitalization ratio at the end of the quarter was just over 25%. With an outstanding debt level at $49 million. Additionally, our current ratio, excluding our line of credit, is a strong 4-to-1 and our EBITDA interest coverage is about nine times. To summarize, our diligent working capital management and prudent debt structure have added additional strength to our already solid balance sheet enabling us to weather economic downturns and yet still invest in business building opportunities. Lisa, this concludes our prepared remarks. Let's open the line for questions.

謝謝你，Brent。早安。我們原本預期經濟會在2002年第一季觸底而且即使不預期會有任何顯著程度的成長，至少能避免進一步下滑。但事實並非如此。自2001年第四季以來我們看到進一步的惡化，尤其是在辦公家具產業，而且各項指標仍不明確，無法判斷何時能夠趨於穩定，更遑論復甦會在何時出現。儘管經濟情勢使得CompX無法達成我們期望的財務成果水準，我們仍成功透過成本與基礎架構管理來抑制毛利率的侵蝕。現在讓我們看看2002年第一季的業績。如Brent所說，CompX在第一季的每股盈餘為9美分。這較2001年第四季調整後的每股盈餘提升了28%。這也顯示我們已執行的成本削減措施所帶來的影響。我們在2001年第四季報告的每股淨損為9美分，係因若干一次性項目所致。若排除一次性項目，以及2002年因商譽攤銷所做的會計變更影響，2001年第四季調整後每股盈餘本應為7美分。與2001年第一季相比，每股盈餘因整體經濟衰退而下滑63%。第一季淨銷售額為4,860萬美元，較2001年第四季改善逾3%，但較去年同期下滑18%。從2001年第一季到第四季，CompX安全產品淨銷售額成長12%或200萬美元，主要由新業務開發所帶動，且對辦公家具產業的依賴降低。然而，合併後的CompXWaterloo與CompX Regout業務較依賴辦公家具OEM廠商，與2001年第四季相比小幅下滑約1%。即便如此，我們仍在辦公家具產業中以競爭對手為代價取得新的業務，使CompX的市占率提升。所有業務部門相較去年同期的淨銷售額降幅都更大，原因在於整體經濟持續下滑。CompX Waterloo與Regout下滑22%，而CompX安全產品的下滑幅度約為其一半。我們的成本削減努力有助於保護我們的營業利潤率。在2001年期間，我們因疲弱經濟導致銷售快速下滑而經歷利潤率下降。2002年第一季的營業利潤率與2001年第四季調整後的營業利潤率持平。第一季營業利益為250萬美元，較2001年第一季下滑53%，但在排除一次性項目及商譽攤銷後，較2001年第四季調整後表現好2%。我們將在2002年持續推動基礎架構成本改善議程，並力求進一步提升利潤率。並如Brent所提到，將積極推動新業務開發，並配合新產品導入以提升營收。現在讓我們轉到資產負債表，看看營運資金與負債。如我在先前的電話會議中所說，我們在此領域的關鍵指標是應收帳款週轉天數、應付帳款週轉天數、存貨天數、現金缺口、自由現金流量，以及負債對資本化比率。我們在營運資金管理方面持續取得實質進展。在第一季末，我們改善了現金缺口；其定義很簡單，即應收帳款週轉天數加上存貨天數減去應付帳款週轉天數，較2001年第四季末改善了1.8天。這在本季對現金流量帶來近100萬美元的正面影響。存貨天數與應付帳款週轉天數的改善是此一表現的主要貢獻因素。CompX自2001年年中導入以指標為基礎的管理以來，已將整體現金缺口縮短逾18天或17%。我們相信隨著年度推進，仍有額外的進一步改善空間。CompX自由現金流量（我們定義為營運現金流量減資本支出）在第一季為80萬美元，且較去年同期好260萬美元。資本支出為370萬美元，較前一年約低2%。此外，我們的現金轉換效率（即自由現金流量除以淨銷售額）為1.7%，較2001年第一季領先4.7個百分點。我們顯然把現金流量管理得很好，並在季末擁有接近3,300萬美元的銀行現金。關於負債，CompX歷來一直維持低槓桿水準；本季末我們的負債對資本化比率略高於25%。未償還負債水準為4,900萬美元。此外，我們的流動比率（不含信用額度）強勁，達4比1，而我們的EBITDA利息保障倍數約為九倍。總結而言，我們嚴謹的營運資金管理與審慎的負債結構，為我們原本穩健的資產負債表增添了額外的實力，使我們得以度過經濟下行，並且仍能投資於業務成長機會。Lisa，我們的預備發言到此結束。現在讓我們開放線路進行提問。

Thank you. The question-and-answer session will be conducted electronically. If you would like to ask a question, please press the star key, followed by the digit 1 on your touch-tone telephone. We will proceed in the order you signal us and will take as many questions as time permits. Once again, that is star 1 to ask a question, and we will pause for just a moment to assemble our roster. Mr. Hagenbuch, there are no questions at this time.

謝謝。問答環節將以電子方式進行。如果您想提問，請在您的按鍵式電話上按下星號鍵，接著按數字1。我們將依照您示意的順序進行，並在時間允許的情況下盡可能回答更多問題。再次提醒，提問請按星號 1，我們將稍作停頓，以整理提問名單。Hagenbuch 先生，目前沒有問題。

Okay, Good. In closing I remain realistic about the tough economic environment we are in but positive about how we are managing through it. As I said before, we have a very strong balance sheet and economic fundamentals that will allow us to weather the storm and importantly invest extensively for the future. Again, I am thankful for our leadership and dedicated employees who are succeeding with our strategy to gain new business and productivity. It should pay off handsomely in time. Thank you for your interest in CompX and in listening today. Back to you, Lisa.

好的，很好。最後，我對我們所處的艱困經濟環境仍保持務實，但對我們如何管理並度過這段期間抱持正面看法。如我先前所說，我們擁有非常強健的資產負債表與經濟基本面，使我們能夠安然度過風暴，並且更重要的是，為未來進行大幅投資。再次，我要感謝我們的領導團隊與敬業的員工，他們正透過我們的策略在開拓新業務與提升生產力方面取得成功。隨著時間推移，這應該會帶來可觀回報。感謝您對CompX 的關注，以及今天的收聽。交回給你，Lisa。

That concludes today's teleconference. We do thank you for your participation today.

今天的電話會議到此結束。我們也感謝您今天的參與。