The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Philip Gibbs - KeyBanc Capital Markets - Analyst
: Geoff, the EBITDA per ton ex inventory holding gains and losses I think was down about $26 a ton sequentially, certainly not something we were
expecting. I know you guys have been managing your profitability within a pretty tight range. What made it drop off so abruptly sequentially in
particular? I know you did give some color, but what were some of the biggest, I guess, impacts to that? And when should we expect you guys to
get back to some of the levels, we're more used to?
Question: Philip Gibbs - KeyBanc Capital Markets - Analyst
: And then when you guys highlighted the bad debt expense from the customer bankruptcy and the increased reserve and then also the professional
fees, any way to square up the magnitude of those three items?
Question: Philip Gibbs - KeyBanc Capital Markets - Analyst
: And then the professional fees? I'm sorry.
Question: Philip Gibbs - KeyBanc Capital Markets - Analyst
: Any reason you guys didn't carve those out similar to the other items that you did or is some of that expected to recur as you take on Sitem or
should that wind down as the transaction gets closer to close?
Question: Philip Gibbs - KeyBanc Capital Markets - Analyst
: And then lastly, as you guys look out into the early part of next year, I know typically volumes do lift a little bit into the first part of calendar year
and then certainly much stronger in the latter part of the fiscal year for you all. What are you expecting in terms of kind of customer sentiment,
particularly as you come out of this period of deep carve-out from one of your key auto customers?
Question: Martin Englert - Seaport Research Partners - Analyst
: A question on the increase in the reserve and the bad debt expense. What type of industry were those customers operating in?
Question: Martin Englert - Seaport Research Partners - Analyst
: Okay. Are you seeing, I guess, other risks across any -- elsewhere in those industries or those verticals?
Question: Martin Englert - Seaport Research Partners - Analyst
: Okay. Appreciate that. And then a follow-up question on looking forward, change in the US administration and if there are changes on the trade
front with tariffs with our trading partners to the north and the south. Could you walk through the puts and takes for your businesses, positives,
negatives, or neutrals as you think about it? I know you have significant operations to the north and the south and continued investment there in
growth.
Question: Martin Englert - Seaport Research Partners - Analyst
: Okay, understood. Appreciate the color. If I could, one last one. When you look out across all your end markets, automotive, construction, general
manufacturing and elsewhere, I understand you're moving through a lull right now. Maybe volumes were a bit worse than expected and I understand
the context with one specific OEM.
But what are the customer -- I understand that they're constructive with their outlook. It seems like you are maybe a couple of quarters, some type
of recovery. But are you seeing any green shoots on the margin today of improved activity or folks with order books out into early next year speaking
to improvements or inflections in the marketplace?
Question: Martin Englert - Seaport Research Partners - Analyst
: Do you think there may be some demand pull forward in automotive and or other end markets because of anticipated broad-based tariffs with
the incoming administration, so people trying to get ahead of potential inflation. So, by now before that might be implemented?
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