Magellan Aerospace Corporation (MAL) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by and welcome to the Magellan Aerospace Annual Meeting 2020. [Operator Instructions] I will now hand the call over to Murray Edwards. Please go ahead.

Good afternoon, ladies and gentlemen. My name is Murray Edwards and as Chairman of Magellan Aerospace Corporation, I would like to welcome you to this annual meeting. This is our first ever virtual annual meeting. As you are all aware, and out of abundance of caution and in keeping with the advice of health authorities, Magellan is conducting a virtual annual meeting in audio-only format over the Internet. In doing so, Magellan is proactively dealing with the public health impact of the COVID pandemic and mitigating risks to the health and safety of our communities, shareholders and most importantly, employees. Although a virtual meeting doesn't give us the opportunity to meet with you in person, and for that, I do regret it. I always enjoy meeting with a number of shareholders and introducing the management, employees and manage directly. But this year, because of the global situation, we cannot do it. We do look forward, though, to meeting with you next year when we have our Annual General Meeting in person. First, I would like this opportunity to welcome our management, employees and directors who are also on the phone for this call, who have joined the meeting from around the globe. I acknowledge the following directors present on the meeting: Larry Moeller from Calgary, Alberta; Steve Somerville from Toronto, Ontario; Beth Bandler from Toronto, Ontario; Bruce Gowan from Northern Ontario; Bill Davis from Brampton, Ontario; Phil Underwood from Bournemouth in England, and myself. With that, the meeting will now come to order. We will ask Craig Vaughan, Corporate Secretary of the Corporation to act as secretary of the meeting; and Josette Koffyberg, representative of Computershare, to act as Scrutineer. In order to ensure that the formal business proceeds efficiently, we would ask -- that we have asked certain employee and shareholders to make a second motion. This is designed to facilitate the progression of the meeting and is not intended to discourage comments. Magellan has also has some forward-looking statements and does not assume any obligation to update or revise any forward-looking information except in accordance with applicable securities laws. In view of the meeting being conducted in a virtual audio-only format, before we start the formal business meeting, we have a couple of quick housekeeping points. The only business matters to be brought before this meeting are the items set forth in the notice of meeting and management proxy circular of the corporation dated March 20, 2020, that was mailed, e-mailed or otherwise made available to all shareholders. Only shareholders of record at the close of business on March 20, 2020, or their duly appointed proxy holders are entitled to submit questions and vote at this meeting. Those persons that wish to ask a question may do so by clicking the question icon on their computer, tablet or smartphone, composing their questions and then submitting it. Please indicate your name and whether you are a shareholder or a proxy holder. All questions submitted relating to the item of business to be for the meeting will be accepted by the Secretary, and they will forward them to me. Any such questions will be answered at the time that, that is presented for discussion. We have received an affidavit from Computershare as to the mailing of the notice of annual meeting, management information circular and instrument of proxy to shareholders. We direct that this affidavit, together with copies of the documents mailed to the shareholders, be kept by the secretary with the minutes of this meeting. Pursuant to the bylaws of the corporation, business may be transacted at this meeting if 2 persons are present at the meeting, and they hold or represent by proxy not less than 10% of the total number at issued shares of the corporation entitled to vote at the meeting. The scrutineers have confirmed that a quorum is present. The Scrutineer's report shows that there are 56 proxies cast for shareholders wholly representing by proxy, 52,776,524 shares or 90.5% of the shares, which are entitled to be voted, present at this meeting. The scrutineer's report will be kept with the records of this meeting. Accordingly, as there is a quorum of shareholders present at this meeting, we now declare that the meeting is regularly called and properly constituted for the transaction of business. All voting today will be conducted by way of a poll over the Internet. I hereby declare polling open, and I'll leave it open until the last item of business on the meeting has been completed. You may vote by clicking the voting icon on your device. If you have any difficultly, please refer to the instructions found in the virtual AGM user guide sent to you with the annual meeting material. The user guide is also available on Magellan's corporate website. You do not need to vote at the meeting if you already voted by telephone, Internet and -- or mail. However, if you wish to change your vote or have not previously voted, you may vote online during the meeting while the polls are open. Thank you for those who have already voted prior to meeting. Those votes will be tabulated, along with today's votes by the Scrutineer, who will provide us with a detailed voting after polling have closed. We will also post those results on our website and at www.sedar.com, so all shareholders can see the results of today's meeting. The next item of business is the receipt of the 2019 consolidated financial statements of the corporation as included in our 2019 annual report to shareholders for the fiscal year ended December 31, 2019, and the auditor's report thereon. A copy of the annual report has been made available to each registered shareholder in either hard copy or electronically. The financial statements of the corporation for the fiscal year ended December 31, 2019, can also be found on the corporate's website or at sedar.com. I now place before the meeting the consolidated financial statements and the auditor's report thereon for the year ended December 31, 2019. Any questions? Seeing none, I'll proceed to the next item of business is the election of directors. The Board has fixed the number of directors to be elected meeting at 7. I will now entertain nominations for directors to the corporation. Do I have a motion in that regard?

Mr. Chairman, my name is Jo-Ann Ball, and I'm a shareholder. And I nominate N. Murray Edwards, Phillip C. Underwood, Beth M. Budd Bandler, William G. Davis, Bruce W. Gowan, Larry G. Moeller, Steven Somerville as directors of the corporation to hold office until the next annual election of directors or until their successors are elected or appointed subject to the provisions of the Business Corporation Act Ontario and the bylaws of the corporation.

Mr. Chairman, my name is Brian Oakley. And I am a shareholder. I second the nomination.

So Brian, and Jo-Ann, have you voted your shares in the right way?

We did.

Absolutely.

Good. Okay. Are there any further nominations? Also, could the Secretary Craig advise me if there are any questions with respect to nomination directors, Craig?

Mr. Chairman, there will be no further questions in respect to the nomination of the directors.

As there are no further nominations, I now declare nominations closed. The next item of business is the appointment of auditors. Do I have a motion in that regard?

I move that the firm of Ernst & Young LLP Chartered Professional Accountants be appointed auditors of the corporation until the next annual meeting or until their successors are appointed and that the remuneration, as such, be fixed by the Board of Directors.

I second the motion.

Thank you, Brian. Thank you, Jo-Ann. Can the secretary advise me if there are any questions as with respect to the appointment of auditors?

Mr. Chairman, there will be no further questions in respect to the appointment of the auditors.

Seeing there are no further questions we received, we will proceed for the vote. Again, remember a vote, it is only available for registered shareholders and duly appointed proxy holders using the control number or use their name. As the case may be. If you're eligible, please do as I declare the voting to close of all items of business in a minute. So we please have the vote in respect of both the election of directors and in respect of the appointment of Ernst & Young as auditors. So we -- so have a vote now. Please vote, everybody. I'll pause for a minute while you vote. That brings to an end the voting on items to be voted upon. I have been advised by the scrutineers that the ballots and proxies nominated for the meeting are in favor of each of the resolutions for the appointment of nominees for directors and for the appointment of Ernst & Young LLP Chartered Professional Accountants. As such, I hereby declare that each of the nominees as directors of the corporation have been duly elected as directors, and Ernst & Young LLP Chartered accountant professionals has been appoint -- has been approved, and the Board of Directors has been approved and authorized to fix their remuneration. And directors and auditors will hold these positions until the next annual election or until their successors are elected or appointed, subject to revisions of the Business Corporations Act Ontario and the bylaws of the corporation. I also direct scrutineer's report in respect of the final voting details be kept with the minutes of this meeting. Could the secretary advise me if there had been any questions in respect to the minutes of the meeting, Mr. Secretary?

Mr. Chairman, there will be no further questions in respect of the meeting.

Thank you, Craig. Okay. So this is -- I appreciate everybody. This is obviously a very quick and maybe what some people call efficient. Although I would argue much less personal way of doing an annual meeting. But given the current environment and such, I think that our team has done an outstanding job in allowing us to do the meeting in this way. I also would -- quickly before we terminate the meeting, I would also quickly like to acknowledge the contribution and support from each of the directors of the Board over the last year. Obviously, Magellan last year had a number of successes, and clearly, there are some challenges. The last couple of months have brought further challenges to the sector in terms of -- clearly, the commercial aerospace sector is having a very challenging time, and that is rolling rate through to the aircraft manufacturers. And we're seeing, obviously, an impact on our business. I am confident on -- credit to the management team, led by Phil Underwood and his team of leadership around Elena and Jim Powell, Simon and Jason and the balance of the team, that they have been very proactive and been very early in identifying some of the challenge before us and looking at ways to make our operation as efficient and productive as possible in this challenging environment. And at the close of the business today, we'll be reporting our results for the first quarter. So if there's no more questions, I hereby declare need to be terminated. Thank you, Elena. Thank you, Jo-Ann. Thank you to Computershare. With that. I will hang up. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.