U.S. Markets open in 3 hrs 3 mins

Edited Transcript of UFAB earnings conference call or presentation 7-Nov-19 2:00pm GMT

Q3 2019 Unique Fabricating Inc Earnings Call

AUBURN HILLS Nov 25, 2019 (Thomson StreetEvents) -- Edited Transcript of Unique Fabricating Inc earnings conference call or presentation Thursday, November 7, 2019 at 2:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Byrd Douglas Cain

Unique Fabricating, Inc. - President, CEO & Interim CFO

================================================================================

Conference Call Participants

================================================================================

* George Melas-Kyriazi

MKH Management Company, LLC - President

* John Nobile

Taglich Brothers, Inc., Research Division - Principal Equity Analyst

* Rob Fink;FNK IR;Managing Partner

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, ladies and gentlemen, and welcome to the Unique Fabricating Q3 2019 Earnings Conference Call. (Operator Instructions)

At this time, it is my pleasure to turn the floor over to Rob Fink of FNK, IR. Sir, the floor is yours.

--------------------------------------------------------------------------------

Rob Fink;FNK IR;Managing Partner, [2]

--------------------------------------------------------------------------------

Thank you, operator. I'd like to welcome, everyone, to the Unique Fabricating Third Quarter 2019 Earnings Conference Call. Hosting the call today is Doug Cain, Unique Fabricating's new President and Chief Executive Officer.

Before I turn the call over to Doug, I'd like to remind everyone that matters discussed on this conference call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements relate to future events or to future financial performance and involve known and unknown risks and uncertainties and other factors that may cause the company's actual results, levels of activities, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed or implied by statements made on today's call. All such forward-looking statements are based on management's present expectation and are subject to certain risk factors, uncertainties that may cause actual results, outcome and performance to differ materially from those expressed by such statements. These risks and uncertainties include, but are not limited to, those discussed in the company's annual report on Form 10-K for the period ended December 31, 2018, which has been filed with the SEC pursuant to Rule 424(b) and, in particular, the section titled Risk Factors.

All statements on this call and including in this morning's press release are made as of today, and Unique Fabricating does not intend to update this information unless required by law.

In addition, certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes that the presentation of these non-GAAP financial measures are useful to investors in understanding and assessing the company's ongoing core operations and prospects for the future. Unless it is otherwise stated, it should be assumed that any financials discussed in this call will be on a non-GAAP basis. Full reconciliations of non-GAAP to GAAP are included in the press release that was issued earlier this morning.

With all that said, I'd now like to turn the call over to Doug Cain. Doug, the call is yours.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [3]

--------------------------------------------------------------------------------

Thanks, Rob. This is my first earnings call after having joined Unique Fabricating as President and CEO on September 30. In these 6 weeks, I have confirmed my beliefs for during the hiring process that I am exactly where I meant to be. I have significant experience as CEO, CFO and COO, with a company similar in many ways to Unique Fabricating that became a much larger and very successful business. Combined with my background as a passionate leader driving cultural change and improved performance, my experiences have served and will continue to serve me well at Unique Fabricating.

Since joining the company, I made site visits in 7 of our 9 locations and held discussions with location management teams and shop floor personnel. We held meetings with all levels and locations of the organization to share the background and direction of the cultural, organizational and operational changes underway as well as to review our current position and to identify our improvement opportunities. These site visits and employee meetings have instilled a strong optimism and clarity of purpose for what the company will achieve going forward. I have held meetings with key stakeholders and service providers to complete a comprehensive assessment of the business. This serves as the basis for company-wide focused operational and financial improvements with a renewed sense of prioritized urgency.

I am very energized and encouraged by the rapid alignment and support of the management teams and their staffs as well as the confidence expressed by the Board to take the actions required to realize the opportunities that are ahead.

This has been an exciting few weeks. Our management team and Board have embraced our new corporate theme that Unique Fabricating is boldly back on track. We are cascading this message throughout the organization in a clear and consistent way. We are sharing this with our external stakeholders. These words are not just an empty slogan. This theme is part of the overall challenge I made to the organization to improve the culture and instill a reinvigorated pride in all of what we do and in all the places we work.

This builds a forward momentum to enable the dramatic and necessary changes underway. As very critical aspects of successful turnaround, while identifying key talent and ensuring organizational structure is aligned to meet the targets, I focused on assessing the organizational capability. We simplify and realign the organization, including the executive level to eliminate redundancies, position resources to optimize value to the business, flatten chains of command, provide clear accountability, develop new business opportunities, grow current market share, profitably increased capacity utilization and drive operational and financial improvements across the organization, while taking advantage of the many recently identified cost reduction opportunities. I am very encouraged by the responses from our employees as they are empowered by clear direction in focused areas of accountability. The teams are talented and experienced with an obvious commitment to doing what is necessary to ensure the success of the company.

In my first week, I accepted the resignations of our CFO and our Senior Vice President of Operations. I have extensive experience serving in all 3 roles simultaneously in my previous company. While we search for a permanent CFO, I will continue to serve in that role where my active CPA license remains an asset. To provide greater line of sight and improved mentoring of the operations leadership, I do not currently plan to replace the Senior VP of Operations.

Our end markets are strong, and our product offerings are well positioned as they are in line with trends shaping the future of the automotive industry and other sectors. We have a diversified customer base, comprised of top-tier manufacturers and OEMs with limited customer concentration risk. When operating efficiently and effectively, our operating model has relatively low CapEx requirements with a corresponding beneficial ROI. We are one of the largest suppliers in the markets we serve and have significant opportunities to grow both organically and through acquisitions.

As we have yet to capitalize fully on the available synergies from our recent acquisitions, we are outlining executable plans to achieve improved efficiency, best practice sharing and decreased complexity, thereby lowering overall costs.

Our existing customer relationships remain positive. We realigned the front end organization and increased capability to ensure clear focus on expectations and responsibilities. We are confident that this will help us to create and communicate our unique selling points in existing markets while expanding into medical and aerospace. Our talented, experienced commercial, engineering and manufacturing teams are identifying a number of areas where we can grow market share to utilize profitably our open capacity and value solution-oriented products.

Hallmarks of my leadership focus are comprehensive business understanding, passionate sense of ownership and a keen emphasis on financial performance. I acknowledge that the financial results we are reporting today are prior to my start and do not show the benefits of the steps we have already taken and are undertaking to improve the results.

With the going-forward expectations now clearly communicated to the organization, these results are not acceptable to the shareholders, the Board and the management team and are not indicative of the performance we expect to deliver in the future.

We have filed these results with the SEC and detailed them in the earnings release issued earlier today. While I will not read through the results during this conference call, I will do my best to answer any questions you have based upon my reviews of the business.

I am fully and passionately committed to helping Unique and its employees improve all aspects of our company with the resulting dramatically improved financial performance for the shareholders and all other stakeholders. While acknowledging that it will take time for the full impact to be realized, the path is clear and the work is already well underway.

We are developing a detailed comprehensive cost reduction and organizational rationalization plan, expected to generate substantial operating income impact over the next quarters. These improvements are largely independent of the plant closure savings.

As another key lever of improving operational performance, we have identified several activities to reduce our high-cost debt levels, while improving our overall financial condition. We finalized our decision to close our Bryan, Ohio plant to align capacity with customer demand in a more cost-effective manner with the closure expected by the end of January 2020. This action will achieve approximately $1.3 million in annual cost savings. We expect to record charges of approximately $1.2 million as part of this restructuring. This activity follows the previously announced closing of our Evansville, Indiana plants. We expect to save approximately $1.3 million annually from this closure. We own one of our buildings and have engaged a firm to sell this property in the most cost-effective manner. As we lease the other building, and our lease expires on November 30, 2022, we have an obligation for future payments of $1.1 million. We have engaged a third-party firm to assist us in minimizing this future impact. All production at Evansville will cease by the end of this November and all remaining transfers will conclude mid-December 2019.

In summary, I am energized by the great opportunity to develop the organization, maximize profitable growth and create significant shareholder value at Unique Fabricating. My interests are fully aligned with those of the shareholders. I see tremendous value here, and there is a unique opportunity to create something of which we can all be proud. I firmly believe that God places us where we are meant to be, and I am confident that my talents and prior experiences are perfectly suited to address the needs of the company.

I look forward to getting to know many of you over the coming quarters. You will learn that I'm very direct and believe in binary communication. Soon, I will be able to outline with greater specificity, the timing and magnitude of the already identified opportunities.

While we clearly have a great deal of work ahead, Unique Fabricating Inc. is boldly back on track.

With that, we will open the call up for questions. Operator?

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) And we'll take our first question from John Nobile with Taglich Brothers.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [2]

--------------------------------------------------------------------------------

Doug, welcome aboard. And I just have a couple of questions. I wanted to back up to one of your comments. You just said in Ohio. What was the name of city in Ohio you're closing that plant? Say it again?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [3]

--------------------------------------------------------------------------------

It's Bryan, B-R-Y-A-N, Bryan, Ohio.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [4]

--------------------------------------------------------------------------------

Okay. And was it $1.3 million in annual savings, and you're going to take a charge of what, $1.2 million?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [5]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [6]

--------------------------------------------------------------------------------

I just want to make sure. And that's scheduled to be fully closed or started in January FY '20?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [7]

--------------------------------------------------------------------------------

No. We expect to complete all production by latest January -- January 31, 2020.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [8]

--------------------------------------------------------------------------------

Okay. So production will be done there.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [9]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [10]

--------------------------------------------------------------------------------

Okay. And let me just get to a couple of questions here. You took a $1.7 million inventory allowance in the third quarter. Now when I do the math, I exclude that and I get a gross margin of about 23%, which really if I look over the last 12 months, it's a very significant improvement. So I just wanted to see if there was anything in there that was an anomaly that may have helped it. Obviously, the inventory at the moment didn't help it. But without that, 23%, I mean I just wanted to find out what caused really a significant improvement in gross margin considering you had a decline in revenue?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [11]

--------------------------------------------------------------------------------

Well, I would tell you based upon my review to date, which, again, as I made in my comment, is somewhat limited, that there were several, I say, improvement opportunities that were already begun previously, which included some labor rationalization in the plants and shift schedule rationalizations that were done. We have made some improvements on the material utilization side in a couple of our plants. So it's a combination of these things along with the fact that we had made a reduction in force that began to see a full impact in the third quarter. So it's a combination of these activities that, I'll say, mitigated the substantial impact of $1.7 million write-off.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [12]

--------------------------------------------------------------------------------

Okay. So basically, with what you have, this is -- there was no anomalies in there. This is a -- at this level of revenue, we should be able to see this kind of gross margin going forward, obviously, excluding onetime items.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [13]

--------------------------------------------------------------------------------

Yes. I've been coached to be cautious in certain of the things that I say. But, yes.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [14]

--------------------------------------------------------------------------------

Okay, okay, okay. I understand. I just wanted to make sure that was excluding that, that I was correct in the 23% gross margin. And obviously, you made mention in the press release, the UAW strike had an impact in the third quarter, which I think it was only a minimal amount of days. But you had -- basically, almost all of October was impacted by the UAW strike. So I'm curious to get your take on what kind of an impact you're going to see with the fourth quarter results. I don't know if you can actually quantify it, how much of a hit this might have hurt the business? Can I get your take on that?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [15]

--------------------------------------------------------------------------------

Yes, absolutely. So one of the things in doing a review of the business, I'd ask to get an overview of our customer concentration and all those things. Our GM business, including the tiers, represents less than 15% of our overall business. So in the third quarter, the impact, which we noted because it would be of interest to the investors and others involved was only a sales impact of $0.2 million in the third quarter. For the October period of time, we have reviewed this and see an impact of $0.8 million in October relative to sales. That's all. And then based upon what we see as GM has opened the spigots and has communicated to our various plants, and I've confirmed this in my different plant visits that they are planning on working overtime and working weekends to catch up quite a bit of production. So we're estimating, in total, maybe a $0.5 million impact in sales with $0.2 million of it already reflected in September.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [16]

--------------------------------------------------------------------------------

Okay. So not as great of an impact as one might imagine, being -- looking at the full month. So that's about $0.5 million impact for the quarter. I mean, obviously, October the strike is over. And I think I brought up on the last call, which obviously, you weren't on it. But there was a $10 million run rate, annual run rate program that was launched in June. And -- which I think was later than expected. So I'm just curious as to how that is going? I mean as we speak, are we up to full production on that program yet?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [17]

--------------------------------------------------------------------------------

So the Ford Explorer program is the one that you are mentioning. In my prior company, we've also seen some impacts from the delayed launch. Ford is having some well-documented issues that I'm not going to comment on. We have some of our own issues. But the impact of that has been less than maybe perhaps as previously communicated. So we're really -- they are ramping that up. It's still slightly behind. But we don't see a negative impact from this going forward.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [18]

--------------------------------------------------------------------------------

Okay. So slightly behind, but in the fourth quarter, are we going to be maybe at the full run rate or definitely kicking into Q1?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [19]

--------------------------------------------------------------------------------

I can't say that specifically. And, John, on that question, I'll certainly follow up and then some kind of follow-on communication, whatever that way we could. I'll check that. But I was just -- the overall messaging is we are seeing an increase and we're not expecting anything that would be material in being less than anything that have been communicated previously, since I know we're no longer -- we have not been providing forward-looking guidance.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [20]

--------------------------------------------------------------------------------

Okay. And as I brought up first question, you plan on $1.2 million of charges with the Bryan, Ohio closing, I guess that will be in the first quarter. Correct?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [21]

--------------------------------------------------------------------------------

Yes. Yes, that is.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [22]

--------------------------------------------------------------------------------

Okay. Now you had restructuring charges showing up in the third quarter. I anticipate that you're going to see some more in the fourth quarter. I just wanted to see what I should expect as far as fourth quarter restructuring. What do we have $990,000 in the third quarter? So how much more to go in the fourth quarter?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [23]

--------------------------------------------------------------------------------

I think we're anticipating approximately $0.5 million more.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [24]

--------------------------------------------------------------------------------

Okay. So about a $0.5 million more. Okay. And just one final question, I'll open it up for others that may have questions. Significant drop in your SG&A expenses, $6.5 million. I'm looking sequentially and even over last year's quarter-over-quarter. So you had made mention of improvement in gross margins. There were definite cost reductions in that area. In SG&A, is this a level that we should anticipate going forward? Or are we going to see even further cost reductions in SG&A expenses? I'm trying to get an idea because it was a big drop. I mean we're looking at what you came off in the second quarter, $7.4 million, and now it's almost down another $1 million in this quarter. So if I can take your take on SG&A going forward.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [25]

--------------------------------------------------------------------------------

Yes. I would say that has been a key focus of my initial organizational review. And relative to my comments about flattening, rationalizing, eliminating redundancies. And also, I believe, very much in simplifying the organizational structure. I can just say that there are substantial additional cost savings and the fixed cost that will be going forward that I'll be in a position to communicate as I noted in my opening comments with greater granularity, but the downward trend will continue.

--------------------------------------------------------------------------------

John Nobile, Taglich Brothers, Inc., Research Division - Principal Equity Analyst [26]

--------------------------------------------------------------------------------

Obviously, the results didn't look stellar when I looked at it, but when I factor out the onetime cost, I believe, there would have been a bottom line, actually, not brackets around it, but positive net income, if I take out the $990,000 and the $1.4 million. It looked like the turnaround is already starting at least in the cost structure. Anyway, that's what I wanted to say.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [27]

--------------------------------------------------------------------------------

I can confirm that.

--------------------------------------------------------------------------------

Operator [28]

--------------------------------------------------------------------------------

(Operator Instructions) And we'll take our next question from George Melas with MKH Management.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [29]

--------------------------------------------------------------------------------

Doug, I also want to say welcome to the company. It seems like you are -- you hit the ground running. So congratulations on that. I just want to follow up on John's numbers on the $1.7 million in inventory allowance. That is not included in the adjusted EBITDA that you provided, the $2.65 million. Is that correct?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [30]

--------------------------------------------------------------------------------

Yes. Yes. So I'm not sure how you're phrasing that. What I would say is the $1.7 million is included in all the operating income levels. There is no impact in it for discussing. So negative impact is...

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [31]

--------------------------------------------------------------------------------

In the EBITDA number that you provided in the release, or I should say the adjusted EBITDA number of $2.65 million. You're are not adding back the $1.7 million, right?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [32]

--------------------------------------------------------------------------------

No, sir.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [33]

--------------------------------------------------------------------------------

No? Okay. Very good. Okay. So that is a significant -- I mean I have the same reaction as John. It seems like the numbers, if we strip out a number of onetime items, have already improved significantly.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [34]

--------------------------------------------------------------------------------

Yes. And as you know, and again you've been following the company more than I have. I never heard of the company before June. But there were several activities that had already begun that we're seeing the results of. And in my comments, back to John, there are many more that are underway to further improve, I'm going to call, our fixed cost structure and put ourselves in a better position to lever up the margins as we work on the front end of the business also.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [35]

--------------------------------------------------------------------------------

Okay. Great. And in your capacity as CFO, have you had a chance to meet with your lenders at this point?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [36]

--------------------------------------------------------------------------------

Absolutely, I have.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [37]

--------------------------------------------------------------------------------

Okay. I'm glad to hear that. Yes. It's probably your most important constituency. Your -- I understand your covenants sort of are -- the leverage ratio is 4.25, it drops down to 3.25 in December -- in March of 2020. Are you comfortable with meeting those covenant expectations at this point?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [38]

--------------------------------------------------------------------------------

So thank you for the question. You can imagine that's been a key focus of my activities from day minus 6 before I started actually. So I would say, as confident as I can be, the answer is yes. We clearly understand that the key factors to be able to ensure that, that occurs. And everything that I know at this point in time says that we will not have an issue with debt covenants going forward. And that's part of the reason in my opening comments, I mentioned focusing on the balance sheet and the financial performance and reducing debt, certain areas where we can do so.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [39]

--------------------------------------------------------------------------------

Great. Okay. And then one more question about customers. Sort of break down your customers as the big 3 and then sort of all the other auto guys. And in the first half of the year, there was a dramatic drop in revenue contribution from auto OEs that are not the big 3. So I'm -- and maybe there were some end-of-life programs there. But I'm just trying to understand what is the relationship you have with the various customers and maybe specifically on the non-big 3 because -- just trying to understand that drop that you had in the first half.

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [40]

--------------------------------------------------------------------------------

Well, I'll split that into 2 things, if that's possible. So if I look it honestly, our revenue dropped Q3 year-to-date year-over-year, okay? What we have is we do have end-of-life automotive programs that represent close to $10 million of the $18 million drop. We have close to $5 million related to plant closure impacts, having more to do with the, I'll say, the appliance and the industry side of the business. I don't think these were fully anticipated when the plant closures were done. There was, I believe, a belief that we would retain more of that business than we did. So that covers you with close to $14 million of the shortfall. The overall automotive market, okay, has only declined in production year-over-year 1.3%. So that ends up being about $1.8 million impact. And then we've had a few customers, primarily on the appliance sign that we've lost relative to competition that's about $2 million. So it's been a -- not just a single factor that has occurred here. When we talk about customer relationships, one of the things that I'm doing is getting out and meeting all the customers. I've got a lot of experience doing that from my prior jobs and I have very strong relationships with the upper levels of all of the OEMs, including, I'll say, some of the nontraditional groups, and this is going to be a focus of mine going forward. But to date, those customer relationships are strong, and we really just need to focus on gaining market share in those businesses and finding those opportunities to take advantage of the open capacity that we clearly have and are now and will continue to be much reduced fixed cost structure.

--------------------------------------------------------------------------------

George Melas-Kyriazi, MKH Management Company, LLC - President [41]

--------------------------------------------------------------------------------

Okay. Great. And maybe just one quick follow-up on that. Sort of the end-of-life probably impacted your year-to-date revenue by $10 million. Is that net of new programs or not?

--------------------------------------------------------------------------------

Byrd Douglas Cain, Unique Fabricating, Inc. - President, CEO & Interim CFO [42]

--------------------------------------------------------------------------------

What I would say is not, but I'm not certain that I tried to get this broken out in a way to where it was not netting anything. I would say that our new programs with the exception of Ford Explorer that John was mentioning earlier, that's just in its ramp phase and really did not have much in the first half of the year at all. That was the one substantial new program we've won. And I've clearly targeted and indicated that we can work on the back-end cost reduction, but we've got to have a renewed focus on gaining conquest business and using our solutions to grow revenue on the front end.

--------------------------------------------------------------------------------

Operator [43]

--------------------------------------------------------------------------------

(Operator Instructions) And it appears we have no further questions at this time. So that will conclude our Q&A session and our teleconference for today. We thank you for your participation, and you may disconnect your lines at this time and have a great day.