TimkenSteel Corporation (NYSE:TMST) Q2 2023 Earnings Call Transcript

Michael Williams: Thanks, John.

Operator: [Operator Instructions] The next question is from Dave Storms with Stonegate Capital Markets. Your line is open.

Unidentified Analyst: Hi, everyone. Thanks for taking my questions. John stepping in for Dave here.

Michael Williams: Okay.

Unidentified Analyst: I guess you touched on melt utilization, could we see that 80% mark in Q3, what steps would it take to get there? And is an 80% average over Q4 still reasonable?

Michael Williams: I think in that the 80% to 84% is somewhat reasonable, I mean, we’re off to a pretty good start for the quarter already. We have 1-month over the quarter completed, and we’re seeing positive improvement from our 75% in Q2.

Kristopher Westbrooks: John, when you get into Q4, we do have our planned downtime, so we’re expecting to be down for about 10 days; that’ll be about 30,000 tons of melt. So I would expect that utilization rate to trend down in Q4 just based on the typical annual schedule.

Unidentified Analyst: All right. Got it. Very helpful. And with the 2 new machine lines, can you provide any additional color? How do you expect they’ll support the increasing demand going forward? Will they have enough, or do you see additional lines being open sometime in the future?

Michael Williams: Yeah, so the investment in those lines is directed specifically at the EV market. We’ve been informed by several OEMs that their demand for the EV components that we manufacture is going to increase. So we’re just aligning our capability with the demand with this investment. And what we will do – going forward, we stay close to our customers as we see opportunity with our customers for increased demand. We’ll make the appropriate investments to make sure we support our customers.

Kristopher Westbrooks: John to add to that, we do expect modest incremental revenue and EBITDA from those investments. And from a timing perspective, it’s likely going to be late 2024 once production commences on those assets.

Unidentified Analyst: Right. Got it. Thank you for taking my questions.

Michael Williams: Thanks.

Kristopher Westbrooks: Thanks, John.

Operator: We have no further questions at this time. I’ll turn it back to the presenters for any closing remarks.

Jennifer Beeman: I think that concludes our call today. Thanks everyone for joining and we look forward to updating you next quarter. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.