Jason Industries' (JASN) CEO Brian Kobylinski on Q4 2017 Results - Earnings Call Transcript

Jason Industries, Inc. (OTC:JASN) Q4 2017 Earnings Conference Call March 1, 2018 10:00 AM ET

Executives

Brian Kobylinski - CEO

Chad Paris - CFO

Rachel Zabkowicz - VP, IR

Analysts

Brad Noss - Roth Capital Partners

Operator

Greetings and welcome to the Jason Industries' Fourth Quarter 2017 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Rachel Zabkowicz, Vice President of Investor Relations. Thank you, Ms. Zabkowicz, you may begin.

Rachel Zabkowicz

Good morning and thank you for joining us today for the Jason Industries' fourth quarter 2017 conference call to discuss our earnings results. If you have not received the slide presentation for today's call, you can access it on our Investor Relations web site, at investors..jasoninc.com, and following the link to our events and presentation page. With me today is Brian Kobylinski, our Chief Executive Officer; and Chad Paris, our Chief Financial Officer.

Before we begin this morning, please be advised that this call will involve forward-looking statements regarding the company and its businesses, as noted on slide 2 of today's presentation. The company's actual results could differ materially from any forward-looking statements, due to several important factors described in the company's latest SEC filings. The company assumes no obligation to update any forward-looking statements made during this call.

We will begin this morning with our CEO, Brian Kobylinski. Koby?

Brian Kobylinski

Okay. Lots to cover today. So a few summary thoughts before we dive into the details. We delivered revenue to our expectations for the year, exceeded adjusted EBITDA and free cash flow guidance, and reduced our net debt leverage by over three quarters of a term. Execution of targeted growth initiatives, operational improvement programs, and self-help projects drove our results in 2017. Simply stated, we did what we said we were going to do.

The opportunity within Jason is real, as demonstrated by our fourth quarter results, and these three items are worth noting. First, margin expansion; we increased our adjusted EBITDA margin by 200 basis points, marking our fourth consecutive quarter of improvement. Even more encouraging, our 370 basis point gross profit expansion enables us to fund ongoing growth and operational resources and actions.

Second, selective growth; our finishing business Osborn, posted its first double digit organic growth rates since Jason went public in 2014. A renewed end user focus is certainly supported by favorable market conditions, and we are beginning to see core growth that exceeds many of our benchmarks.

Third, self-help projects; we announced and kicked off a project to reduce fixed costs in our Janesville Acoustics business, moving operations from Richmond, Indiana into other acoustics facilities. These three highlights are emblematic of our simplified business model, which is illustrated on slide 5. We are focused on two primary objectives noted in the green box, generate cash and delever our balance sheet. Cash has been and will remain our focus. But decisions to invest in targeted growth, continuous improvement in self-help projects are taken seriously. If cash is used for some other purpose than debt leverage reduction, something important like better supporting our customers, it is imperative that we have a high confidence level in our success rate. This model, combined with our culture of simplification, prioritization, effort, execution and decisiveness, is beginning to show on our results. One thing remains, there is much more opportunity at Jason.

Now before I steal all of Chad's thunder, I will turn the call over, so that he can provide more detail relating to our quarter and the full year.

Chad Paris

Thank you, Koby, and good morning everyone. I will start with a review of the fourth quarter results, provide an overview of the year, and then provide an update on the balance sheet and the impact of U.S. tax reform on Jason.

Starting on slide 6, with a review of our results for the fourth quarter, net sales of $145.5 million were 8.3% lower than prior year, which reflects an organic sales decline of 4.3%, and negative impact of 5.6% from the divestiture and exit of non-core businesses, including the impact of the sale of Acoustics Europe operations, which we completed in Q3.

Foreign currency positively impacted sales by 1.6%, primarily due to a stronger euro, as compared to the fourth quarter of last year. Operating income increased $68.9 million, driven by a $63.3 million non-cash goodwill impairment charge in 2016. Excluding this prior year charge, operating income improved $5.6 million.

Adjusted EBITDA increased $1.9 million and adjusted EBITDA margins expanded 200 basis points. The improvements in operating income, adjusted EBITDA and adjusted EBITDA margin resulted from significantly improved manufacturing efficiencies in Acoustics, and exiting unprofitable and dilutive business through our 80-20 initiatives in asset divestitures. This was partially offset by higher selling and administrative expenses as a percentage of sales, due to increased incentive compensation compared with 2016 on improved results.

Slide 7 provides our sales results by segment; our overall organic sales decline of 4.3% was impacted by continued decreases in production in the automotive market, with extended production shutdowns during the quarter leading up to the holidays. However, industrial markets continue to be strong, with higher growth than expected, resulting in overall sales that were in line with our expectations for the quarter.

In finishing, sales of $50 million increased $5.7 million or 12.8% over the prior year. Organic sales grew by 10.2% on continued strength in core industrial end markets, particularly in Europe. It is important to note that the fourth quarter of 2016 was weak, resulting in a favorable comparable in the quarter. The impact of exiting non-core business in Brazil was negative 2.5%, as stronger euro resulted in a positive 5.1% impact on sale.

Component sales of $19.8 million decreased $1.5 million or 6.9%. Organic sales declined 3.5%, primarily due to a decrease in smart utility meter volumes. Sales to our core markets were better than expected, with year-over-year improvement in rail and industrial volumes. While the growth in industrial sales is impacted by both improving industrial markets, and our sales diversification efforts, we believe the improvement in real volumes results from short term changes in order timing with our customers, and is not indicative of a larger long term market recovery.

Sales were also negatively impacted by 3.4%, due to the exit of non-core product lines related to the closure of our assembled products business at the end of 2016.

Sheeting sales of $33.9 million increased $1.8 million or 5.6%, with organic sales growth of 5.1%. Organic sales growth was largely due to share gains in the heavy industry market, including the impact of the new agricultural platform wins announced in Q3, which ramped up during the quarter. The new platform launch helped offset a slow start to the turf care season, as some of our customers extended production of still removable equipment, before shifting production to riding lawnmowers. Our expectation for the 2017-2018 turf care season on whole, remains for low to mid single digit growth.

Motorcycle seat sales grew modestly during the quarter, as customer production volumes of 2018 model year bikes were stronger than the prior model year.

Finally, acoustic sales of $41.8 million decreased 31.5%, which was a 20.3% organic sales decline. The third quarter divestiture of Acoustics Europe, which is not being presented as a discontinued operation in our results, negatively impacted reported sales by 11.2%. Our organic sales were impacted significantly by lower volumes from extended automotive OEM production shutdowns throughout the quarter, as well as non-recurring short-term business in the fourth quarter of 2016, related to a competitor bankruptcy.

Overall, North American light vehicle production decreased 5.9% during the fourth quarter, with car production down over 21%, and light truck production, which includes SUVs, TUVs, and minivans, up over 3%. With our vehicle platform mix significantly weighted toward cars, we believe our organic sales decline of 20% is generally in line with the market.

Over the year, light vehicle production was down 4.3% to just shy of 17 million vehicles produced. With the market share of cars decreasing nearly 5 percentage points from 38% to nearly 33%. As Koby will discuss, our commercial teams continue to target the larger portion of the markets, with new light truck SUV and CUV platforms.

Adjusted EBITDA results by segment are shown on slide 8; overall, adjusted EBITDA for the quarter was slightly better than expected, as we executed on continuous improvement in lean initiatives, focused on pricing in 80-20 and divested a dilutive business.

Adjusted EBITDA margins expanded in three of the four segments, with overall Jason margin expansion for the fourth consecutive quarter.

In finishing, adjusted EBITDA of $5.8 million or 11.5% of net sales, increased $1.5 million or 180 basis points. While the fourth quarter is historically a seasonally weaker quarter, margins expanded due to 80-20 initiatives, including the exit of low margin and unprofitable customers and products, pricing actions, the exit of operations in Brazil, and savings from continuous improvement projects in our facilities. We completed the consolidation of production from the now closed Virginia facility into our main U.S. production facility in Richmond, Indiana; which created some expected short term inefficiencies in the quarter, as we ramp up production in Richmond.

With the transfer now complete, we expect to optimized production return to normal operations by the end of the first quarter.

Components adjusted EBITDA of $2.3 million or 11.4% of net sales, decreased $400,000 or 90 basis points. Adjusted EBITDA was negatively impacted by smart utility meter volumes and increased raw material pricing, specifically steel, in line with our expectations for the quarter. We expect improved pricing, taking effect with our customers in the first quarter, to positively impact margins in 2018.

Seating adjusted EBITDA of $2.3 million or 6.8% of net sales, increased $900,000 or 250 basis points. The improvement was due to pricing actions, supply chain savings, continuous improvement projects in our plans, and better inventory management.

While we are encouraged by the year-over-year improvement of profitability and the results were in line with our expectations for the quarter, the opportunity in seating remains significant. New leadership and plant management are focused on incremental operational improvement, larger projects to structurally improve the business, and new commercial opportunities.

Acoustics adjusted EBITDA of $6 million or 14.3% of net sales, decreased $400,000, with margins improving 380 basis points, despite the organic sales decline due to volumes. Operational improvement projects in the plants achieved reductions in material usage, improved labor productivity, and lower quality control costs, resulting in expanding margins that helped offset much of the volume decline. Finally, corporate expenses of $3.9 million decreased $300,000 due to lower consulting spend, partially offset by increased compensation.

Moving to slide 9; when we consider the full year and reflect on our initial guidance, we are pleased with the improvements in our execution in understanding of our markets and trends. On our call a year ago, we knew we were heading into certain cyclical challenges in some of our end markets, and we shared our organic sales growth outlook for our segments. As we look back, our actual results were better than our expectations in three of the four segments, with an unfavorable vehicle mix shift resulting in lower sales in acoustics. For Jason overall, we were in line with our expected organic sales results.

Our full year results for key metrics are shown on slide 10; Jason exceeded guidance for sales, adjusted EBITDA, adjusted EBITDA margin and free cash flow, resulting in better than expected net debt-to-adjusted-EBITDA leverage. While our year-over-year results included an organic decline of 5%, our disciplined approach to exiting and divesting non-core dilutive assets and improving core operations, resulted in adjusted EBITDA growth of $3.6 million or 5.6%, and adjusted EBITDA margin expansion of 130 basis points.

Our net debt-to-adjusted-EBITDA leverage decreased three quarters of a turn, from 6.2 times to 5.5 times during the year, driven by the improved EBITDA and a $35 million reduction in net debt.

Jason's financial position at the end of the year is shown on slide 11; total liquidity of $95.4 million remained relatively stable, with $48.9 of cash and cash equivalents, and $46.6 million of available capacity and revolving lines of credit. Net debt-to-adjusted-EBITDA fell to 5.5 times compared to 5.7 times in the third quarter.

Operating cash flow for the year was $30.1 million, with free cash flow of $14.2 million, which exceeded our expectations. The year-on-year improvement of $2.5 million primarily resulted from higher adjusted EBITDA, lower capital expenditures and restructuring, partially offset by timing of working capital.

During the year, we retired $20 million of second lien term loan and made repayments of $5 million on first lien term loans. The debt reduction will reduce our exposure to variable rate debt, and mitigate additional interest expense in a rising rate environment. We will continue to focus on free cash flow generation and reducing net debt, and will pay down debt, as cash flow is generated.

Slide 12 summarizes the provisional impact of the Tax Cut and Jobs Act. Our fourth quarter results included $3.7 million tax benefit related to the adoption of the tax act, which includes an $11.1 million benefit on the revaluation of net deferred tax liabilities on our balance sheet at year end. Offsetting this benefit is $5.3 million of tax expense related to the onetime deemed repatriation of foreign earnings, also known as the toll tax, and $2.1 million of tax expense for other discreet items related to tax positions that were impacted by tax reforms.

Given the company's cumulative U.S. net operating losses, there will be no cash tax impact related to the deemed repatriation. The amounts recorded in the fourth quarter are provisional estimates, and will be subject to finalization during 2018. In particular, the company continues to assess the impact of the global intangible low tax income or GILTI provisions of the tax act, and no estimates have been reported related to GILTI. For 2018, we expect cash taxes of $7 million globally.

Now I will turn the call back to Koby, to provide an update on the business and our outlook for 2018.

Brian Kobylinski

Thanks Chad. We began our improvements at Jason, by kicking off a cost reduction program a couple of years ago. This progressed to larger impact actions and are now well into what is a multiyear lean transformation.

Slide 13 summarizes our progress; we are approaching our three year cost reduction target and remain confident in our ability to identify and execute two to three meaningful facilities' rationalization projects each year. Janesville's Acoustics business recently announced facility consolidation, and is a perfect example of our simplified business model in action. The combination simplifies our footprint, generates roughly $2 million worth of annualized savings and pays for itself within a year. Our teams are assessing a number of other opportunities, and we look forward to sharing our plans with you in the near future. Expect an additional two projects in 2018.

However, lean is much more than cost reductions and footprint actions. Slide 14 contains photographs of a number of our facilities that we have improved over the last year. Lean is a continued culture of improvement and some of our most impactful activity does not follow into the readily identifiable cost take out and facility consolidation buckets.

One of our larger facilities is a current flagbearer for our continuous improvement efforts. The location has moved from being red on all customer scorecards to green. Safety, housekeeping, and other foundational activity is evident. But I really want to focus on the quality improvement at this site. The site's 2016 PPM, a quality metric defined as defective parts per million, was four times our customer's acceptable level. For ease of math, say this was 400 PPM. Our performance improved to being just over the targeted level for the full year in 2017, say 100 PPM. That is good. But the reality is, that our performance continued to improve as the year progressed, and year-to-date in 2018, we now stand at 2. That's right, 2 defective parts out of 1 million. We have moved from four times worse to 50 times better than the acceptable customer level. You could imagine the reduced scrap, warranty and expedited frank expenses, not to mention the improved customer goodwill and prospects for future growth under these conditions.

Now it's important to acknowledge that not all of our plans are executed flawlessly. We are far from perfect. Our Metalex components, Libertyville consolidation will take us one more quarter than anticipated and pockets of our business remain stubborn survivors. However, the good outweighs the bad, and our margins reflect the cumulative effects.

We acknowledge more than 60 accomplishments during a recent all employee meeting. These successes are sizable and range from customer awards and new product launches to manufacturing automation installations and facility consolidations, to non-core asset monetization and high interest rate debt repurchases. These initiatives are more quickly achieved and better executed due to fundamental changes we have made to our processes and people.

Slide 15, covers the topic we have not spoken much about, but is critical to managing our activity and sustaining our results. That topic is talent. We are in a second year of policy deployment, which is just a fancy way of saying that our goals are aligned and ownership is clear. We also completed our first formal talent plan, that identified a roster of 35 emerging high potential employees that we plan to invest in. Jason's organizational capacity and skillset increased during the last year. Our leadership team has been upgraded, via a balanced mix of internal and external folks. Each of our four business leaders and functions like finance, operations and HR have been positively impacted.

We are building a roster of spirited people, who want to make a difference. Spend time with any of our key leaders and you will find a foundation comprised of intellectual bandwidth, creativity, work ethic and passion. As we move into 2018, we will continue to drive improvements in our team, particularly in the supply chain and commercial areas.

Speaking of the commercial arena, slide 16 reiterates our targeted growth initiatives. We are seeing some real traction here, and Jason's growth activity is the highest that has been in the past couple of years. However, not all sales are good sales, and we will continue to apply 80-20 techniques to prioritize our base of business, even if it means, reducing our overall growth rates.

One of our businesses was recently asked to pay a significant upfront fee, just to participate in a bid process. A bid process that began at pricing levels far below our normally accepted levels. Our team assessed the opportunity, and what it meant for growing some revenue. They made the prudent decision to redeploy the time, resources and attention to businesses that presented positive contribution. We continue to secure positive wins and pursue other opportunities, a few are worth noting.

Metalex won a $2 million order for safety grading in a new non-rail heavy equipment application, that helps diversify our customer base. Milsco is progressing with new construction equipment applications, possessing long term opportunity to impact revenue, and Janesville added a new specialty equipment manufacturer to its customer list and continues to progress prototyping with a new Asian manufacturer.

One of the common themes across all of our businesses is increased end user focus to pull product demand through market channels. Slide 17 represents some additional methods Osborn is using, to increase our presence and preference with end users. YouTube product placement and testimonials, jobsite vans, and specialty trade shows, are three tools we are now employing. We are able to efficiently obtain product and application ideas, while stimulating sales and building our brand.

We entered 2018 with a balanced view of the market, illustrated on slide 18. Our sales will be under pressure for another year, due to market conditions and proactive elimination of unprofitable revenue. We will grow our industrial businesses, particularly Osborn, as strong market conditions heading into the year, will help support our internally driven efforts to capture share.

Finishing as a business, possessing opportunities and wins, best characterized as bumps and singles. Our book-to-bill ratios continue at levels greater than 1.0, indicating momentum as we head into the new year, and we are putting runners on base.

Demand for filter product should remain strong at double digit levels, positively impacting our Metalex business. Conversely, railcar manufacturers are indicating that the rail market overall and covered hopper niche in specific, will decline during the year, by mid-single digits.

Our OEM businesses will be down in 2018 for various reasons. Milsco is in the process of exiting an unprofitable customer relationship, which will adversely impact our top line, but not have a meaningful impact to EBITDA. The new customer addition we highlighted last quarter, provides a revenue offset, and above line average EBITDA margins. Seating will also continue to experience the demographic headwinds facing the heavyweight motorcycle market.

It's important to note that we are committed to these customer relationships, and are working to do what we can to advance their efforts to reverse the trend. North American vehicle sales projections are projected to be flat to down low single digits. However, as Chad mentioned earlier, our mix is skewed to the underperforming sedan segment. Car builds are down roughly 20%, as manufacturers attempt to adjust channel inventory for declining end user demand.

We also are faced with platform changes that impact the back half of 2018. We are not rolling over and taking the punishment however. In fact, we have won roughly $10 million with an annualized business with new customers, for a number of important new platforms that will begin to positively impact our top line in 2019. We have wheel aligners with the European base manufacturer, as well as an array of [indiscernible] products in to the four platforms that we won, half of which are SUVs. These are with new Asian headquartered manufacturers.

Overall, we are committed to growing our EBITDA dollars for the second year in a row, despite an anticipated low-to-mid single digit sales decline. Based on this outlook, our 2018 guidance is reflected on slide 19. First, as we bridge from our 2017 reported results to 2018, it is important to consider the impact of our acoustics European divestiture. This business was in our 2017 results, through the end of August, and accordingly, we have shown Jason's results excluding acoustics Europe to assist with this comparison.

Also note, that our net debt-to-adjusted-EBITDA reported leverage has reflected the pro forma effect of the divestiture and trailing 12 month EBITDA since we completed the transaction in the third quarter of 2017.

For 2018, we expect sales of $600 million to $615 million and adjusted EBITDA of $66 million to $70 million. Our free cash flow outlook is $13 million to $17 million, which includes approximately $4 million of cash restructuring and capital expenditures of approximately 2.8% of sales. This guidance results in 4.9 to 5.3 times net debt-to-adjusted EBITDA at year end.

Slide 20 provides a bridge from our 2017 adjusted EBITDA to 2018 guidance. Volumes will be lower due to negative net platform changes in acoustics, that will impact the second half of the year. We expect to more than offset the acoustics volume declines, with growth in our other businesses, favorable pricing actions through our 80-20 initiatives, savings from the cost reduction program, and continued operational improvements in our plans.

As we consider the normal seasonality of our business and the timing of platform changes in the third quarter, our year will be more front-end loaded than usual, with approximately 55% of our revenue and nearly 60% of our adjusted EBITDA, expected in the first half of the year. Additional information on the year-over-year revenue bridge is available in the appendix to today's presentation.

Slide 21 illustrates our journey forward; a journey that appeared a bit daunting, when we first articulated it. 2017 was a positive first step, and now that we are a year into our transformation, the task appears more manageable. Our objectives in 2018 are similar to 2017. First, deliver incremental EBITDA dollars, despite sales declines through operational improvements, portfolio and mix management and targeted growth initiatives. The low end of our 2018 EBITDA guidance range is at or is above our actual 2017 EBITDA for continuing operations.

Secondly, generate improved free cash flow year-over-year via increased EBITDA and better of working capital management. Third, reduce our leverage by an additional quarter to a half of a ton. And finally, continue to simplify our operations, most visibly, by consolidating another two to three of our sites.

In closing on slide 22, we completed what was a good quarter and a good year. We exceeded guidance on every key metric. Our sentiment remains balanced. We plan to exceed the targeted profitable growth in the face of select market headwinds. Our operations are improving, and yet there is so much more to do, more opportunity to grasp, to better serve our customers and positively impact our bottom line.

Our team is stronger and more skilled, but gaps remain. We are generating more cash and are reducing our leverage, though there is more cash to generate and certainly more leverage to take down.

I mentioned in my first earnings call a year ago, that one quarter does not make a trend. While I am not sure that one year marks a long term trend either, it does however, begin to instill confidence and earn an ounce of credibility, things we can build on. Our entire team looks forward to 2018.

With that, I will turn the call back to the operator to open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from the line of Matt Koranda with Roth Capital Partners. Please proceed with your question.

Brad Noss

Hey guys. This is Brad Noss on for Matt.

Brian Kobylinski

Good morning Brad.

Brad Noss

I wanted to go ahead and just look at how you are factoring in commodity headwinds. There are potential commodity headwinds in your 2018 EBITDA and free cash flow guide, also in finishing components, I guess primarily steel exposure for seating, I think there were some references to foam chemical pricing by other seating suppliers that I have heard, and then for acoustics, just polyester, fiber headwinds, potentially in 2018, and so can you just address those for me please?

Brian Kobylinski

Yeah, sure Brad. So just a few things that are significant to us, you hit on a couple. Probably the most significant is bicomponent fiber or bico used in our acoustics business. The primary issue in terms of material costs is some tariff activity that has happened, that we expect will impact next year. We have got over $5 million in our guidance and in our plan for overall material inflation, including the impact of bico. The other big commodity is steel, in our components business, and that's really the other big piece, the balance.

We have seen some upward pressure on chemical price in seatings. It's not huge, but it's certainly something that we are keeping an eye on.

Chad Paris

The only thing I would add Brad, is if you think about our Osborn business, we have got a little bit of channel power to be able to impact pricing, to offset commodity expense increases that we may see throughout the year, and we continue to work within our components business, to do some pricing strategies to execute those to kind of make sure our pricing is more in line with what happens with the underlying commodity costs.

Brad Noss

Okay, that's helpful. Thanks for the color. And then just looking at, I guess, your finishing growth was strong, but margins were -- although they are improved, they are a little bit lighter than what we had expected, especially given some of the exit of the lower margin business, and then the other things that you had mentioned. But can you just talk about any specific end markets or mix between distribution and OE or any other impacts that may weigh on the margins a little bit, and how you expect to track into 2018?

Brian Kobylinski

Sure I will start, and then Chad can come in on the backend of this. One of the things that we highlighted on the call here earlier was, we did this transition of manufacturing operations from Virginia to Indiana. That's a pretty profitable product range for us, and we know, one of the impacts was, we took a step backward on our service delivery within the quarter. So you had a bit of revenue that got pushed out with more profitable items. In addition, we had some temp labor and some additional things that we had to spend a bit of money on. That probably had about a $200,000-ish type of impact to the quarter, and you know, we will get it cleaned up here in quarter one. That's probably the first identifiable item that's out there.

Chad Paris

The only other one I'd mention, it has improved year-over-year. Fourth quarter, particularly in Europe, which is over half of the business, we do have an extended lull, if you will, over the holidays, and that impacts the business seasonally, it has in the past, and that proved to be true, although we were able to improve margins in the segment overall, through some of the other things that I mentioned in my earlier comment.

Brad Noss

Okay, that makes sense. And then maybe if I could just sneak one more in here, regarding components, you'd referenced some [indiscernible] to smart meter volumes this quarter. Can you just talk about how that baked into the 2018 outlook for the components revenue? Do you expect some stable volumes there for 2018, or should we get back to see continued pressure?

Brian Kobylinski

Well I think what you will see, some of that shortfall, quite honestly, could be coming through into the first quarter, with a little bit of a shift in timing. Overall for the year, I think our confidence on the first half is pretty strong, and for the back half of the year, as you get in the outyears, that volatility comes into play. In any type of relationship, where you have that much concentration, it's prone to those types of swings.

Brad Noss

Okay. Perfect. Congrats on the strong quarter guys. Thank you.

Brian Kobylinski

Thanks Brad.

Operator

[Operator Instructions]. Our next question comes from the line of Jason [indiscernible]. Please proceed with your question.

Unidentified Analyst

Hi there. So just three questions on Acoustic. First of all, why were the sales you picked up in 2016 on the bankrupt competitor not recurring in 2017? Secondly, how has your market share changed in Acoustics than 2015 timeframe? And then lastly, what enables you to beat competitors in that acoustics industry? Is it product innovation, sourcing, or customer relationship?

Brian Kobylinski

So I will handle two of those, and then I will let Chad come in on the backside. I will start at the last question. One of the things that really -- we have done a very nice job of, is this whole technological transition from blow molding and compressed classic components to our fiber components. We have got a really strong value proposition, in which our fiber materials enables the panels to be lighter weight, which clearly with the OEMs is a bigger deal. They are more flexible, so they don't crack, which means maintenance is a better thing, and it also offers some acoustical properties, as stones hit it.

So if you think about wheel aligners on vehicles or under body panels, it's pretty strong, a strong sales pitch that we can offer.

Regarding the bankrupt competitor, I mean, that comes into one platform [indiscernible] where they come in. We helped out in this situation and really did it to open the door when we had operational issues with our business. So we kind of went above and beyond the call, to help out an OEM, which opened up before we got the green status, our ability to quote and win business. We did win an SUV associated with that assistance. It doesn't necessarily flow through the numbers just yet, but that's one of the reasons we did it.

You had one other question about market share. I think if you look at it from sedans, the market share is consistent. But if you look at it because of the mix shift that has occurred in the marketplace to more light truck and SUVs, it's hard for us to not say that -- it's hard for us to say we haven't lost share. Surely, on the end user preference. So --

Chad Paris

That has been a big driver. The way that we have measured share has historically been content per vehicle. And while the North American vehicle build is down, about 4.5% this year, our revenue is down quite a bit more, because of the platforms that we are on. And so, that content per vehicles for us is down, and we are working to replace those platforms, as we go into 2019 and 2020.

Unidentified Analyst

Great, thanks.

Brian Kobylinski

Thank you.

Operator

There are no further questions in the queue. I'd like to hand the call back to management for closing comments.

Rachel Zabkowicz

That does [ph] close our call this morning. Thank you for your interest in our company, and we look forward to updating on our future progress, when we report again.

Brian Kobylinski

Thanks guys.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.