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Savaria Corp
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Good morning. My name is Marcella, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Savaria Corporation's Q4 and Full Year 2019 Conference Call. [Operator Instructions]This call may contain forward-looking statements which are subject to the disclosure statement contained in Savaria's most recent press release issued on March 25, 2020, with respect to its Q4 2019 results. Thank you. Mr. Bourassa, you may begin your conference.
Thank you very much, Marcella. So I am with -- I have with me, Mauro, our CFO; Sébastien; and Nicolas Rimbert.First, our year 2019 is a great year for Savaria. When you allocate like 4 best item who grew at 30%, 37%, 38%: revenue, 30%; gross profit, 34%; net earning adjusted; and EBITDA adjusted, 37%; that's great, great number. That's the participation of all our people for integration. So it's very good. So you all have the time, okay? Me, I will be concentrating more on thinking about the outlook, what we see coming, what we are, okay? And I am very happy what I have seen since the beginning of the year. We have new projects. So we are very, very optimistic for 2020.But I will -- first, I will pass the line to Mauro, our CFO.
Thank you, Marcel, and...
Thank you, Mauro.
Yes. Thank you, Marcel, and good morning, everyone. We'll start with a general overview of our financials before moving on to operations. The corporation generated revenue of $374.3 million in 2019, up $88.3 million or 30.9% compared to 2018 mainly due to acquisitions. The corporation's Accessibility segment grew organically by 3.2% while revenue within the Patient Handling and Adapted Vehicles segments contracted, all in line with management's expectations.Gross profit and gross margin stood at $125.3 million and 33.5% in 2019, respectively, compared to $93.4 million and 32.7% in 2018. The increase in gross profit was in line with the increase in revenue. Gross margin as a percentage of revenue increased mainly due to a combination of a better consolidated product mix and supply chain synergies. Adjusted EBITDA and adjusted EBITDA margin for the year stood at $55.6 million and 14.9%, respectively, compared to $40.3 million and 14.1% for the same period in 2018. The increase in adjusted EBITDA was in line with the increase in revenue mainly due to acquisitions made in 2018 and 2019. The increase in adjusted EBITDA margin was due to the integration-related improvement in Garaventa Lift's stand-alone adjusted EBITDA margin as well as an improvement in Patient Handling's adjusted EBITDA margin due in part to the exit from Span's custom products market segment and an increase in patient lift revenue. The adjusted EBITDA and adjusted EBITDA margin derived from Silvalea, acquired on July 1, 2019, also had a positive impact on the Patient Handling reportable segment's adjusted EBITDA metrics as a whole.Now moving on to operations. Revenue from the Accessibility segment stood at $265.7 million for the year, up $97.1 million or 57.6% compared to 2018 due in large part to the acquisitions of Garaventa Lift made in Q3 2018 and Florida Lifts in Q1 2019. Organically, revenue grew by 3.2% mainly due to an increase in core residential elevator unit sales in line with management's expectations.Adjusted EBITDA before head office costs was $44.2 million for 2019, an increase of $14 million or 46.4% compared to the same period in 2018. This increase in adjusted EBITDA before head office costs was mainly due to acquisitions made in 2018 and 2019. Adjusted EBITDA margin before head office costs stood at 16.6% compared to 17.9% in 2018. The decrease in adjusted EBITDA margin before head office costs was due to the blending of Garaventa Lift's operations which have a higher structural cost base when compared to legacy Savaria. Garaventa Lift's stand-alone adjusted EBITDA margin before head office costs stood at 10.6% for the year, steadily improving from 7.3% in Q1 2019 and in line with expectations. On a stand-alone basis and excluding the favorable impact of the adoption of IFRS 16 leases, the legacy Savaria Accessibility reportable segment generated an adjusted EBITDA margin before head office costs of 21.8%. Revenue from the Patient Handling segment stood at $86.9 million for the year, a decrease of $2.9 million or 3.3% when compared to the same period in 2018 mainly due to lower revenue from Span's custom products market segment, partially offset by Silvalea acquisition-related revenue. The lower revenue from Span's custom products market segment was in line with management's decision to exit that segment effective Q3 2019.Adjusted EBITDA and adjusted EBITDA margin before head office costs were $12.1 million and 14% in 2019 compared to $9 million and 10%, respectively, in 2018. The increase in both adjusted EBITDA before head office cost metrics was due to a better product mix from Span, the contribution from our Silvalea acquisition and continued cost-containment efforts. On a stand-alone basis and excluding the favorable impact of the adoption of IFRS 16 leases, adjusted EBITDA margin before head office costs would have been 13.5%. Costs and provisions pertaining to the corporation's decision to exit from Span's custom products market segment totaled USD 1.6 million, lower than the corporation's initial estimated cost of USD 2 million.Revenue from the Adapted Vehicles segment was $21.8 million in 2019, a decrease of $5.9 million or 21.2% when compared to 2018. The decrease in revenue compared to the previous fiscal year was due in part to the termination of a nonprofit organization's vehicle accessibility program at the end of 2018 as well as the nonrenewal of a Province of Québec's subsidy program for adapted vehicles in 2019.Adjusted EBITDA before head office costs for the segment decreased from $2.2 million to $0.9 million, in line with the drop in revenue. Adjusted EBITDA margin before head office costs was 4% compared to 7.8% in 2018. The decrease in adjusted EBITDA margin before head office costs was mainly due to reduced fixed cost absorption. Excluding the favorable impact of the adoption of IFRS 16 leases, adjusted EBITDA margin before head office costs would have been 2.2%.Operationally, 2019 was a transitional year. The corporation continued its integration of Garaventa Lift and exited Span low-margin custom products segment leading to an improved consolidated adjusted EBITDA margin profile. From a strategic perspective, the 2 tuck-in acquisitions made during the year, Florida Lifts and Silvalea, increased the corporation's market presence in a key Accessibility segment geographical area and added a complementary product line and new distribution channels to its Patient Handling segment. With a very strong balance sheet and a net interest-bearing debt to adjusted EBITDA ratio of 0.2x, the corporation is on solid ground to take advantage of growth opportunities.Turning to the current worldwide COVID-19 outbreak. We are closely monitoring the developments surrounding it and have taken the steps needed to protect our employees and stakeholders. The corporation is and will continue to align itself to guidance being provided by the various levels of government and agencies pertaining to this outbreak until its resolution.Marcel, back to you.
Very good, Mauro. It's always not easier, but it's always fun too when you have some good number to tell to our people, and you have been making a very good job. So let's go to hear what our people has to ask. Marcella, go with the first one.
Okay. Marcella.
[Operator Instructions] Your first question comes from the line of Michael Doumet.
Look, I'll start off on congratulating you on the quarter and the year, but obviously, we're all trying to grasp what the future holds. So as most economists are calling for a pretty severe contraction in Q2, I'm reading housing starts could decline by more than 10% in U.S. in 2020. So for each of your Accessibility subsegment, I understand they have different sensitivities to the cycle, but can you just give us a rundown on how to think about the businesses as we potentially go into a downturn in the next 2 quarters?
Okay. It's a pleasure. For sure, we are a company who have the most imported on the residential elevators. So that we can bend [ earth ] a little bit, but we're in many different territory. But for sure, that's very important for us. Span, we have an opportunity to grow on the medical side. And when I see that, the diversification and everything, I feel very positive about 2020. But you are right, okay? Residential elevator can be a little bit contraction in this Accessibility segment for us. Sébastien, do you want to add something?
Yes. Maybe. And it's important to understand also, we have some new product launch this year. We have a new Zenith residential home elevator. We have a new LU/LA traction elevator, which we're the first in the market in North America to have that. We have a Mini Vuelift, which -- we have a lot of hope on our Mini Vuelift. It's just a smaller version of the existing Vuelift. That's something we are going to launch in Europe and in North America. Even now, maybe some of our dealer are working a bit more from home. But next week, we have like 5 webinar with over 100 architect, builders and dealers just talking about those new products. We still see a lot of orders coming in into the factory and maybe some order that are postponed a little bit later. But still, as of right now, our main factory are working, except Italy and the Montreal car conversion, but the rest are -- many location are still busy at this time.
Okay. So just on the elevators, I think you gave a pretty good color, obviously, macro decline, some share gains potentially. Patient Handling feels like it's set up to actually gain from what we're going through. Just any comments on stairlifts and the platform plus -- and then just comment on Italy as well that you alluded to.
So that's -- basically, Italy, we have a shutdown for the next 2 weeks, but we have been able to provide all our delivery to a different direct office so that they can continue to work in the next few weeks. So we'll see what will happen in Italy. But at one point, it's important that the country has to shut down a bit, just like what they did in China. In China, they did a very good job. And they have a shutdown during the Chinese New Year and then 2.5 weeks more for our case. So we are back in production since February 19. It did not -- China did not cause any disruption in all our supply chain because we have been able -- we had a good strategy on our finished goods, which is 3 weeks in North America, 3 weeks in China. And at the beginning of the virus, we have decided to ship all our finished goods to North America to make sure we'll have no disruption. So as of today, China is back up and running at 95%. It will be at 100% next week. They just did a good job with all their precaution that they have to do. So the same thing has to happen in Italy, and this is what they are going to do in the next 2 weeks. And hopefully after that, things will come back to normal gradually. So that's a bit.After that stairlift, that's something that -- last year, we had a decline on the stairlift. We want -- this year, that's a focus for us. We want to have a growth on our stairlifts, so we have put some curved stairlift into production in Vancouver and Italy. This is something that should help us to grow in the future and again we have a lot of help on our Mini Vuelift. I think that's -- going to help. We don't need construction. We can put that into existing housing. So we are going to try to make sure we can generate some marketing growth with some new products.And as you see with the Span, the medical, that's an opportunity. There's a lot of request for beds. Right now, we are working hard in Beamsville to increase our capacity. And even, we are going to make some parts of beds into our elevator factory in Brampton just to support our bed factory. So we are very committed to that. Sling, Nick will talk more later, but we have put a lot of energy this year to put that into production in Greenville. So I think you will see a good ramp-up into the sling sector this year.
And just for ad and financial question, we -- when China go back to production for us, we are lucky to be spared in general. So we see what's happened in China, okay? So February 19, back roughly at 90% and with 0 case of coronavirus. And as of yesterday, almost 100% of the people are back and 0 case. So no development of case in our factory from February to today. So we can see that we have to monitor what can be the trend here in North America, okay? But I think to start covering the people, the discipline is very different in North America than in China, okay? That's 2 different kind of people, but that could see that if we are very disciplined, we are getting out of that, but not overnight. But it's that -- it's something that will be resumed 1 day. Thank you very much for your question.
Your next question comes from the line of Nick Agostino.
So first of all, let me give you guys compliments on managing the -- your supply chain. I think you guys have been doing a really good job obviously with China, Italy and now with the virus moving to North America. Again, kudos on that front. Just to try to understand the -- obviously, you're pulling the guidance. So I just want to understand how Q1, you indicated it's in line with your expectations. Can you give some color as to what you were seeing on the demand side on sales and, for that matter, installs in Italy, starting with Italy and then more recently in North America as most of this continent that's in quarantine?
Okay. Just to be maybe more or less optimist than I am, I will pass that to Sébastien that know very much our operation.
So basically, for sure, we saw the first 2 months was pretty good. The last month of the quarter is always a push. So March is not finished. We are working hard to push the maximum. But so far, even to the -- like on Monday, we had a very good day of order coming in. Maybe some dealers are staying at the -- at home and pushing out their orders for the next few weeks because they want to make sure it will go through production. Italy, yes, they are closed for 2 weeks, but they had a good first start of the year. They have some new products that they're making to production. So that was a big change also in 2019 for Garaventa. All our store has been profitable in 2019. So we start with 2020 with a much solid base. There has been a big change of culture within the Garaventa. Congratulation to all our general manager and Mr. Vince there to push that through. So I think we are going in the right direction, and we continue with a lot of initiative just to build on that.
Okay. And just looking at, I guess, your Patient Handling segment. Sales are ramping up, so that's good to see. I think you guys gave the commentary that lift is gaining momentum. But this quarter, we saw the margins come down quarter-over-quarter. Any color there as how we should be -- it looks like you've got a better product mix but on the other hand, margins were down. Any color there?
Yes. We have our specialist here, Mr. Rimbert.
Yes. Nick, so in terms of margins in the quarter, I think it -- I mean when you say it goes down, it was at 14.9% versus maybe 15% in the prior quarter. So I'd probably say that's more in line with what it was in Q3 as opposed to necessarily a decline. We're talking about 0.1% of a difference there. I guess overall, I would say now that we've exited the custom products and we look at kind of the back half of 2019 where we also had the contribution that came to Silvalea. There, again, there's a ramp-up that's involved at Silvalea. We fully expect that Q1 and going forward, it's going to add to that margin improvement. So as you look at kind of 2020 as a whole, last year, we accomplished 14% for the entire year. Our expectation this year of course is to get better than that given that we don't have the custom products which kind of were a drag on the first part of 2019 numbers. So we fully expect to go above and beyond what we were doing last year. Again, what that means, we'll figure that out as the months and quarters progress, but then you can fully expect 14%, 15%. I mean an increase off of last year is expected in the Patient Handling segment.
And don't forget, Nick, it went from 2018 at a 10% to a 14%. So 4 points change is a lot of a team effort from all the Span team and from Jim, our President over there. So it's a lot of work to go from 10% to 14%.
No. I gave you guys compliments and certainly on the Garaventa side, you guys did a good job on the margin front there. Patient Handling, I'm just trying to understand if there's any -- if you're coming up against any resistance. It sounds like that's not the case and just keep plugging forward.Just the last question. On the Q1 and Garaventa, typically a seasonally weak quarter. Is that the way we should be looking at again? Or have there been things that you guys have put in place over the last year and certainly pushing more and more into North America with the Garaventa product line and into Italy? Is the seasonality that we saw historically less of a factor this year? And I'll leave it there.
Thank you, Nick. But yes, I am very optimist about what they gave us so far in the quarter. And Sébastien is in real contact with Vince that maybe you can take a little bit about this question, Sébast?
So for sure, if you look at Garaventa, last year, we went from 2019 from a 5.9% of EBITDA to the average of a year at 10.6%. But it has been a continuous improvement from the beginning to the end. Winter, I think we said it on our original outlook, Q1 should mirror last year. Winter is winter. Construction is slowing down. So I think it will always be hard to reset the first quarter. But definitely, we should continue to see an improvement through the year for Garaventa starting from Q1 to finish to Q4. We hope this year we can improve by 2% on Garaventa by continuous improvement on our purchasing, on our -- for activity in the factory to be more efficient and just continue to bid on all our store to be profitable. And we also have some new product introduction like the Mini Vuelift in Europe for Garaventa. So -- and some stairlift that we have make. We say a little bit earlier that we are doing in Italy and Vancouver. So all this product mix should continue to help Garaventa through the 2020.
Okay. Great.
Thank you, Nick. And I'll just add something. The Mini Vuelift is something incredible for people around the world. Even in maybe 3 weeks or 4 weeks, I would put one in my house here in Georgetown that my 3 level will be accessible, and it would be put inside of my round stair. So this project is -- it's magic, easy to install. You need just a little bit or if you don't have it basically, you put a ramp on the other side, that you have a ramp. So I just put oil, cylinder oil. And it's amazing. So you will see that when I will post that in maybe 4 weeks. What is that? So from 0, we put accessible, just at the right place, so it's fantastic.
Your next question comes from the line of Frederic Tremblay.
First question on Greenville. I was just wondering if you could provide an update on the ramp-up of manufacturing for patient lifts and slings and curious to know as well ultimately what would be the revenue capacity of that facility for lift and sling. I know you were talking about a $20 million target for sales by 2021. So just curious to know if that's the ultimate capacity in that facility.
I will ask to Sébastien and Nicolas to answer this question for me.
Nick, you start.
Yes. Yes. I'll start. So first, we'll start with the sling. So the slings, as we mentioned I guess on our last call, we're transferring production or certain production to Greenville, so we're ramping up there in terms of equipment that we have. Sling equipment, specialized sling equipment has been installed. We have an automatic cutter. We have sling testing machines. And so we're certainly ramping up right now. We're probably doing around 100 slings a week. So that's a nice ramp-up from 0 just a few months ago. So we are seeing a steady increase there from sling production and seeing that ramp up. Our initial target is sort of in that kind of 400 to 500 slings a month and then ramping up from there as demand necessitates. As it relates to the ceiling lift portion of it, there, again, we do -- it's important to note that we produce ceiling lifts in both facilities, and so in Greenville and in Magog. In Greenville, it's primarily dedicated for the U.S. market. In Magog, primarily for the Canadian and the European market. It's -- we're optimistic, I guess cautiously optimistic, that we are seeing a pretty good ramp-up in sales of ceiling lifts in that first year. I think we've talked quite a bit about this going from having that 1 portable product we sold $1 million worth in 2017, and then going to $3 million in 2018 as we kind of expanded the product category last year at $5 million. And so we fully expect a ramp-up in those numbers as well in 2020. At the same time, we're adding slings to the mix, right? So if you think about the slings that it's contributed by Silvalea, we're talking about $8 million or so of slings. So when we're thinking about our $20 million there, I mean it's very realistic. The ramp-up in sling lifts -- ramp-up in sling sales to the North American channels to get there in 2021, I think it's a very realistic target for us.And just in terms of capacity, we've said it in the past, at Greenville, we've removed the custom products, right? So there's, call it, 40% of that facility has been freed up. So I'm not saying that we're going to fill that entire -- because that's a lot of square footage, right? We have 180,000 square feet in Greenville. So I'm not saying that it might all filled up with slings and with lifts. We're also building a showroom there. So there's other kind of improvements that we're making there in Greenville as well. But in terms of capacity, we're very well -- we're able to ramp up. So there's no increases that are necessary in terms of footprint to get to that $20 million.
Sébastien, what you do in Beamsville?
Basically, in Beamsville, as we said a bit earlier, we are ramping up the production. So because there's all the demands of beds, we are looking to work at 7 days a week for 24 hours a day. I'm sending my production director over there toward the next few weeks to help them to ramp this up. And we are going to make some bed parts in our Brampton factory, the elevator one. Also, we have some new product this year, which is important to talk. We have a new bed with scale that we can monitor the weight of the person in the bed to a state. And after that, we have some new products for the ceiling lift like a [ bio-tweak ] lift, which is up to 1,200 pounds, which is the highest capacity on the market. We have some new gates product that fix -- lift can go from one room to the other. We have a new range of sling. So I think there's a lot of different activities which is happening to support this Span growth.
And maybe just one last thing, Sébastien, there. So sorry, Nick -- or sorry, Fred. As it relates to the investments also, I mean we talked a bit about certain personnel that we've hired. So we're increasing I guess on the sales side as well our reach, expand primarily, as you may recall, the long-term care focus or post-acute care focus. So we have put investments in there to tackle some of those kind of acute care accounts. So that's something else that we're kind of trying to push towards as we move in 2020, which will increase some of our sales in that segment. So just expanding a little bit broader than just long-term care and home care, but trying to penetrate the acute care market as well.
And we have a new director of sales, right?
Exactly. Yes.
Nicolas, we have a new guy from [ Argo ], right?
Yes. We have a person -- so some I guess a couple of people that we've added on to the team there that have experience in that segment and that also have I guess corporate account type backgrounds that will be able to open some doors for us primarily in the acute care side of things. So that's also something that we're very excited about as we look to 2020, 2021 to grow that segment of the market as well for our products.
And if you look at your outlook for raw material costs given the current environment, how does that look going forward?
Sébastien?
We're always on the case, Fred, as you know. For sure, there's no cost increase so far this year. And this morning, when I was traveling to the office very early, I saw that the gas price was going down. So I say to my purchasing manager, maybe it's time to review our price of the steel. But we're always on top of the game to make sure we review if there's a cost-saving opportunity, do we transfer some new parts to China, do we work in-house to be more productive, what is the cost of the entrant. So I think we are very proactive on these parts.
Okay. And then last question from me, maybe for Marcel. You mentioned in the past that you would look to be active on the acquisition front in 2020. Did the current situation sort of shift that priority?
I will tell you that we will have some -- we've had discussions with some people and we pushed that by the end of August to continue negotiation if it's there. And when you look at -- I always see the good side of something, that's my nature. And I am maybe like that, so that's my nature. And we're -- our average forward was 130, okay? But earlier -- or later last week, I put some forward for 3 years at 142. So you can imagine that's again actually some very good mention when we will go back full time, that when you collect at 142, that's not too bad.
Your next question comes from the line of Zachary Evershed.
Overall, congrats on the quarter. First question for you and we've touched on this a little bit, but I just wanted to clarify. With the situation evolving very quickly, even in the last few days, have you seen a noticeable step change in demand?
No.
And the next one...
Yes. If I speak too much at the call, can I pause it myself if I speak too much, okay? So no.
Is your business listed as an essential service in each of the geographies you work in?
Yes.
Okay. And then this one will get a little bit more in depth. How much of your revenue is from installations outside the residential, so in public spaces?
That one is a good question. So when it's good question, I will pass that to Sébast.
So basically -- excuse me, I heard something.
No. No. Just to give you an example about [ what's working ].
Are you asking me now?
Okay. Yes, yes. But me, like in Toronto, what is good about maintenance, that's an essential service, okay? And we're classified with that by Canada or by Québec. So -- and our revenue, it's like 20%. So I am -- we try always to put the maintenance contract to all our office, even with our leaders, okay? So it's always good that you have something that's come back month after month, okay? And the margin is very good on that and the people need that, okay? You are in a building, you need an elevator to function, and we give service 24/7. So we push that, and I think our customer appreciate that.
Maybe I'll just jump in here, Zach. As it relates to the breakdown here, I mean, I guess a lot of focus for Savaria and residential elevators are important for us. But as Marcel pointed out, I mean we generate 15%, 16% of our accessibility revenues do come from parts, maintenance and services. And then outside of that, certain of our products are more commercially oriented. So of course, residential elevator is in the residence. But if you look at some of our wheelchair lifts, most of the wheelchair lifts are installed in commercial settings. And again, this is for ADA compliance as we look at various building codes throughout the U.S. and Canada. We also have I guess our LU/LA elevator as well, which is more geared towards the commercial setting. So I would say we're a bit balanced there as it relates to residential versus commercial installs on the accessibility front. And then you got to think that we also have that Span business, which is, call it, 25% of our revenues. And that again isn't necessarily impacted by certain downticks in housing starts or anything of that nature. I mean that's more geared towards the current health care environment, which, at the time, was actually quite positive. I mean, again, negative COVID-19, I don't want to downplay that, but in terms of our sales being -- we are planning sales that are helpful in this current environment.
That actually leads in really well to my next question, which is if this pandemic response extends into months or if we see a recession afterwards, how dependable do you think that Patient Handling revenue is under pressure?
This is a very -- it's a unique type of recession. This is -- I mean again, I don't really want to go into that. I'm not an economist. But the idea that if we get pushed into a recession, I mean this would be geared -- it would be kind of driven by this virus, this COVID-19 virus that we're talking about as opposed to any sort of other financial or bank-related recession. So for us, I mean, I would say that our revenues would be holding up pretty strong here. I mean in terms of demand, we can't go into much detail as to what impact it might have. I mean it's quite early to tell. But for sure, there is a lot of interest around our beds and services. I mean there's -- as you all are aware, there is a shortage. There's the bed shortages in the hospitals and in various health care facilities. And there's a surge that may or may not be coming. And so to the extent that happens, I think we are quite well positioned with our product category of beds, of mattresses and of slings, lifts and slings.
That's great. And just one last one from me. On the front of protecting employees and putting in place more measures to make sure that everyone is safe and respecting hygiene, what kind of costs do you think are associated with those initiatives?
Sébastien?
I don't think the cost is very high because -- but for sure, we have put a lot of measure in place. First is to follow the government regulation to do some isolation of when people are sick or coming back from travel. Now maybe there's more -- no more travel, but there was 2 weeks ago. Good hygiene. We talk about more soap, more sanitation station. Right now, we are looking if we can sanitize all our factory in the next few days. We recommend that people follow good social distance. I would say maybe the biggest cost, Marcel can talk about it. He had a great memo last week for our employees.
Yes. That's right. And I don't know if you read that, but we participate with our employee. Good or bad news, we are there with them. And I decided last week to give each employee, from the guy who with -- in the shipping or the VP, I give them $1,000, okay? And you should see the thanks that I receive from my people is just that's grade 8, okay? It's great to receive the money, okay? But that's -- create more [ appetence ] of Savaria that they look at us and say, "Hey, what the company is doing for us?" And I decide that you are in the States or you just change your currency and you see like the state will be 700. But in China, with the RMB and when you receive that, it seems that I will be the Prime Minister of, I don't know, China, okay? Everybody loves me so much down there. And it's just a good thing that we participate. Teamwork.
[Operator Instructions] Your next comes from the line of Ammar Shah.
Congrats on the quarter. The majority of my questions have been answered. I just had a couple here. First is I know you talked about the potential impacts from COVID-19, but I guess I'm more interested on hearing from you guys how much on the expense reduction side can be done in the face of -- if there is any further stoppages or disruption-related impacts?
Sébastien, any specifics on that?
So basically, I think we're -- as we say a bit to all our employee, we go a day at a time. We try -- for sure, we try to plan in advance. But we just see what is happening in every states, in every country, because we are at many different place. And since we try to update our employees every week about what is the new measure that we can put in place. So we really have to go 1 week at a time to see what new measure we can put in place to protect our people. I think so far, we have tried to be very proactive. Example, like we have limit the access to our showroom just by special appointment. We tried to do some webinar with our customers. So I think that's a bit what the best we can do for now, and we will see over time all of the situation, and we are not the only company in this. It's the same for every company.
No. For sure, I agree. And then just a final one from me. You had alluded to this pretty much the majority of the call, but just wondering if there's anything additional color you can provide. You guys are a company that obviously has operations in Italy and China, some of the early markets that have seen impact from COVID. Just wondering if there are kind of any learnings from being in those markets that you guys think you can incorporate into the other markets you're in that it seems like set to face kind of similar disruptions. I'll leave it at that.
Nicolas or Sébast?
Nick?
Yes. I mean, Sébastien, please fill in if I miss out here. But you're absolutely correct. I mean we were able to -- I mean, unfortunately, we experienced this through China first. And the measures that we're able to take in China and kind of whether it be from providing mass hygiene stations and documenting employees, really the social separation, these are things that we've been able to kind of experience unfortunately firsthand in China a couple of months ago. And so those are things that we are looking to learn from as we plan for a potential similar kind of consequence here in our factories in North America. So I would say we have learned from those experiences. Séb might be able to speak to some certain specific examples, but that is kind of a benefit that we were able to kind of go through China. As Marcel said earlier, on February 19, we're back into production. Now we're back at 95% production a few weeks later. And so yes, it did take 2 months, but we are back at full speed now from our experience there in China. So I don't know if, Sébastien, you have any specific details you want to mention about what we might be able to learn from that.
No. I think again, it's just discipline. People have to be disciplined. And we see that slowly once everything get under control, life is going back to normal. When I'm speaking to my people in China, people are starting to go back to the restaurants, starting to go back on the streets, starting to think about buying elevators again, okay? So we just go -- need to go one step at a time, but first is to be disciplined. That's what the best we can do for now.
Do you have something else? Marcella, any other questions?
[Operator Instructions]
So thanks, everybody.
Sir?
Yes. Thanks, everybody, for your interest in Savaria. I think you will see that we are -- we will benefit our diversification on territory and products, only it's a tough period, okay? We are I think has an advantage of -- with many people. And I repeat, with a good kind of generous investors, U.S. right, we are very well positioned for the future. So thanks again to look at Savaria. So Marcella, thank you very much.
This concludes today's conference call. You may now disconnect.