Forterra (FRTA) 31 Oct 202020 Q3 Earnings call transcript

Good morning, and welcome to Forterra's Third Quarter 2020 Earnings Conference Call. Today's call is hosted by Karl Watson, Jr., the company's Chief Executive Officer; Charlie Brown, the company's Chief Financial Officer; and Simon Chen, Vice President of the Treasury and Investor Relations. With that, I will now turn the call over to Mr. Chen.

Thank you, Angela, and good morning to everyone. Quarter Conference Third Forterra's to XXXX Call. Earnings Welcome as that to provisions we take like of the to of filed intends out point XXXX, Act Reform harbor I'd last advantage night. earnings Forterra the Securities Litigation in noted the Private release of safe Please our implied materially differ from may indicated or comments include are statements, which may remember to actual risks results such that by statements. subject and today forward-looking uncertainties, and those

the our detail important including that most of on The in not any night. SEC on are Some company Form last the risks filings, statements. undertake in described duty our Form the company's XX-K quarterly XX-Q report update annual to filed forward-looking does and was in report such

non-GAAP call, to during EBITDA, measures adjusted margin, refer including EBITDA EBITDA we'll margin net the adjusted Additionally, certain and EBITDA, debt. financial

non-GAAP we reconciliation directly of information, a why find comparable can earnings in measures release. measures our of including and GAAP most You measures related consider to useful other these to investors their discussion these a financial

turn I Karl. over call Now to the will

safe while to everyone. meet closely appreciate customers' COVID-XX, through cases, I our vigilant. Thanks, practices. needs and safe team continuing members fellow morning, teammates my remain we our managing more wealth their diligence want keeping customers' through members our we is thank continued becoming our customers toward the call priority, results positive efficient commitment respect the to health We the today. their our to team among Good the you of and With of the of are being members business highest macro each expectations. of team In our test environment increasing meeting with by Simon. meeting us followed on Protecting to expectations. for their

to in these EBITDA I'd the This a segments our particularly in discipline, record quarter, We further improvement EBITDA. third of on like achieved led outcomes continued G&A progressive both capital commercial which record the plant a Drainage effectiveness. volumes, expand operational capabilities, enhanced we operating profit to margins level decline quarterly pillars: of efficiency and and execution further. health business, our safety, our expanded shipment five and despite gross in and working execution adjusted During our

strategy -- footprint approximately year. higher, such footprint, the volume during across XX% to areas, drainage last the relative some when last Our and XX% And volumes as Contributing commercial declined respect Florida, of things: and our the process stage is early compared our XX% some to where third less this the the during stable to a shipment decline the year. the quarter effect two year-over-year stage weather of to combination commercial a in the third Across increased to increases strategy, we strategy. short-term of in reported volume a difficult market by declines. year, created our results, With Otherwise, quarter before when our and value respectively. for quarter, quarter which compared this it comp margin-enhancing within weather first favorable was implementing were precipitation value we Texas can lead year. before last noted share XX%

this and is this of typical times is sacrificing without with the commercial strategy. this involved not ideal, not Although next have return without, The capital I and unexpected of the been the the many we is train important, implementing very stage our on and have train and we fair objective -- we deployed products produce to is market positions. long-term we achieve a what to and

last are as adjustments drainage both into proper the levels. this as And next made higher and we have moved year's than tonnage backlog, a current result, stage. prices We our

of last ones result a and partners, second just the combination were of flat, XXXX. volumes year. and increase Due see achieved effect compounding X% X, of a year-over-year mix. This down of financial to Similar pricing for product the became of price. quarter our we increase impact of business, the geographic quarter, last we quarter, we For the That October increase announced as largely two August effect until X% the increases our much year. being as XX%. be improvement successful On that won't our the and effective X%, increase selling Water this is up to support in selling year-over-year the In X% is anticipate we the said, X. was distribution average an increase price the both to sales average its our crude last price quarter

goal As we we capital and return have largest prices we discussed, cost input at our scrap, deployed is earn top voluble where point a previously most to fair historical quartile our on when its the our have levels. is increase to a

likely feel While we yet, our not to moderate. product more future pricing the and the size that is with is of point these at be increases implementation increases, successful

working expansion coupled working efficiency. have less by and continued improvements performance. We million of year-to-date through our payments, basis margin have focus interest net $XX Water a operational by capital as better XXX on capital in percentage higher see is the also flow increased of These our sales pillars operating points continued and with source on XX-month year-over-year collections, our reduced our improvements, year-over-year. improvement expect business in we a five The rolling basis. With our cash to inventory managing about cash earnings

will Charlie? our end it a up we million quarter. look the will go over third with ahead. our As call of a by voluntarily and $XXX had loan now through wrap Charlie, turn financials, I'll the result, term I of then the repaid to who

impact morning, our Similar the good details XX% compared segments financial quarter. profit Karl last margin to strategy. our some while favorable everyone. profit than in geographic increase with offset more is cost, is quarter, higher and cost, price tonnage resulting both XXX margin weather in gross improved Drainage which points largely and average provide higher result of from selling and EBITDA average the XX% mentioned increase up mix. conditions to than last year compared year, comments and margin on gross the to our The the as stage and approximately business I'll X%, year-over-year, labor last last Most as the over year-over-year, continues adjusted for gross drainage Karl, backlog year. by year's to before prices down in segment. business additional decreased Thanks, revenue, Drainage, product to Starting volume levels. are mostly less Drainage for prices last selling due as earlier, about X%. significant current in Water growth price the the volume early as well margin. to decreased of this Switching EBITDA of benefiting compared and slightly Volume value our impact That basis were to were prices. quarter commercial demonstrate importantly, higher

discussed of won't compound was Karl other rate. However, much are future last unlikely price such high already note a so our quarter I at than backlog end water repeat as here to increases the higher year. the pricing, the than to that

mostly higher last resulting On by to was cost the year. quarter was scrap in and is unit compared accrual. labor to cost higher manufacturing side, cost in year bonus decrease costs during offset the a attributable higher The slight cost in efficiency, last comparable improvements the labor to

had during that doubled a to compared quarter quarter increase our would nonrecurring As Water gross G&A a note driven expense segment factors, prior of margin also year. Water an by result legal these for nearly accrual. the I the

adjusted year EBITDA was prior to corporate due loss than incentive Our higher higher primarily results, expenses.

profit-focused, to our economic As shareholder system this a year system from switched I've mentioned EBITDA-focused compensation more with aligned incentive before, that is we value.

return in the resulting prudent investments incentivized Our higher and capital and in profit, maximize thus in operating team capital members improvements to incentive value. working are contributed Higher rewards. continuously all economic reduced create of to investment spending profit,

were debt the which net which and EBITDA. to earlier of In our a costs our impacted the paying an the the addition, $XX.X on further was us million our million ratio required third cost. of paydown Karl loan quarter generation during adjusted result the corporate quarter, down was of times. prorated loss write portion end more a charge, $XXX mentioned excluded debt, leverage of quarter in noncash This the X.X than deferred by term extinguishment about reduced debt to significant issuance from at cash that off

earn-out near leverage term. our the now stated S&P. believe our we target as achieve from we times we ruling, received rating credit continuous in upgrade of X.X from rapid our in the leverage double single arbitration can the in that to Because Moody's a improvements the With of ratio, upgrade we as favorable reduction X.X and well demonstrated times have

of to due cash. precautionary a than the conserve delays million, want We response earnings the release year-to-date CapEx second on second quarter Lastly, measure our now of million our disclosed when CapEx. about in in our COVID, $XX annual as below into our -- I a our million. have schedules between million $XX $XX they and million. million projects, been million CapEx ramping full to our expect already our is are will our delayed these up This $XX be and the CapEx $XX spending XX-Q lower projects much end in to to projects that Many all pace, quarter but appropriately to $XX feasible. be to and resumed and normal year targeted We primarily expenditure at was engineered, $XX capital to slotted make of during comment temporary

this spending will get As up a delays result, capital subsequent caught year years. in the in

that working can call, operational During which on health control, efficiency is we capabilities, last the plant improvement capital and stated our and that pillars: execution safety, were focused enhanced G&A the commercial level effectiveness. we quarter's discipline, five we things of

call Karl, discuss demonstration success quarter XXXX With turn to who that, third I'll guidance. Our year full the that our will of was another focus. back

Charlie. Thanks,

the in potential from Looking ahead, near face the remain still and the pandemic. impact we on future uncertainties cautious

uncertain, year results. XXXX of months can with view two the we our we view full is share Although still feel left, only XXXX

in experienced what in quarter volume the quarter experienced We businesses Drainage than to both to and decline the be in Water the the third as quarter year-over-year we to fourth and the momentum third in quarter. expect the our less same volume continue expected we into about fourth is be pricing

side, prices cost last QX increased the trend recently. continues, On the to anticipate we have if scrap year. costs higher be And than scrap

to we be $XX million to to $XXX result, million XXXX million year our million. net full income estimate a EBITDA $XXX $XX As and adjusted be to

debt revising further are our we addition, reduction In guidance.

prepayment term loan guidance million. $XXX to million was trade previous bond $XXX Our

million the expect voluntary we $XXX be of range end third the $XXX million. year to the to million prepayment full With the quarter, now $XXX at

this So prepared will the open for line remarks. questions? Operator, our concludes please you

[Operator Instructions].

the line of is go with question Securities. Rohit Seth first Our Please ahead. from Truist

Congrats there. impressive margin really Tom the price increases on This was Hey. on the the quarter, Rohit. Good morning. is for Buckley and

curious also on -- to just you costs aggregate be think question, input appreciate next guys XXXX? think But I about First what going cement into you are going prices higher just and scrap year. that

Rohit prices mean, -- you did scrap I year? to Seth, be next that expect we say higher

you thought remarks your I [indiscernible]. said thought prepared you that Yes. that in

in the the No, we year, fourth quarter, said fourth uncertain we're was that quarter. that about still but this

that prices, appear is put we As and far the future, this the aggregate higher cement aggregate does as this prices it prices year -- aggregate year. slightly cement past if prices higher did

until and know We what in next those going like increases, to would expect frame But markets. to April. start our negotiations through will would January is certainly get and aggregate increases. would not attempt year both different cement for negotiate time suppliers certainly different to There's I we tend look

likely hit more times once hit you X.X how going And looking then look to allocation leverage X.X do near-term down going of guys you're targets? Okay. at you those with Thanks. capital at to that times, that times, maybe like coming target forward X.X

have we a of... think range I Well,

I -- Tom, was yes.

to to process. more have planning that in those down levels, more clearer get continue broadly. to we in will When point of that and At we We're able our And specifically to we'll a milling to with be inorganically much what the think the view now, pay we options the and once to and look of grow discussing time, Board debt. acquisitions. do, we are are through intending we we're that communicate

you. Thank

Bank line the go from of Lovallo is of question ahead. John next Your America. with Please

for well. as question, Hey, my taking you Thank guys.

attributable the The I value decline strategy rain the appreciate -- you about that of color that is first weather-related attributable XX% was the in that that one is, across portfolio, XX% volume, saw on your in Drainage is on that X% directly that? was the meaning the correlated shipment increase weather. and question component The decline with to

be in expected. mean and the my definitely that that no to remarks, value I our said rain we a of share. And is strategy before little volume Yes. us. affected doubt I lost affected bit us like There's

I our business, absolutely in think Water we perfectly. it executed

whereas easier strategy national it's many local execute I not a give able is same bit market, distributed And in understand in be have ourselves It's would so and markets Water, that's But to who competitive in business But people the it's Drainage. ourselves three We little in competitors, different with that the same that such Water. it's it effort, intensities, many a strategy in say to once A for Drainage it, I an a give I expected, to first execution properly. wouldn't market. stage. A be -- again, for would but more

I made our where prices have backlog have in said that We last remarks, are were like currently, higher both than proper volumes the adjustments. my And at year. we we and

-- didn't it it's do we we say would it but perfectly, I did successfully. So

tie it value necessarily out It's I hard, doesn't precipitation, mean to a of very that year. just Florida it make But that's regions. tie number XX% Unfortunately, -- if perfectly. can about, as was perfectly. talked you of is significant We're doesn't volume. having from increase before weather that volume work the does the that precipitation Hey increase I weather. Texas not about increase a good. John, can precipitation to say component go It being different a it having imagine, in work a last with XX% across in a you're Karl remainder to doesn't in decrease tied specific component XX%

growth more it than Would weather-driven strategy? you of the say is profitable

for better -- I'd a say number. I just have don't XX-XX because

it. Got

scrap In XQ this touched 'XX second. XQ scrap for but on fell and to a sharply. sequentially 'XX, And in turning pretty guys then you Okay. briefly,

it, XQ year-over-year. at 'XX So if similar it XX% XQ scrap levels remains call be 'XX, even to up, would

to So I'm that contemplating the magnitude XQ scrap outlook. of in gauge are increase you trying your just in guys

we're -- -- trend. we've talked don't scrap about for, what actually buying or We but not actually the

-- we in careful very are trends to called trends It's to in be scrap it's the that what prices start similar to bushel American prices #X but want safer What not I in we very showing I pay, Metals. to past. So pay the the what it's than the not they're have expect is But from trends. we are similar. think

does quickly the when And Okay. through scrap flow spot? how buy -- how lastly, it you at P&L

decouple match why costs. They probably -- within flows we strategy had it our our We is pricing reason through that XX to which days, input to don't up. the just

out buy We that is which XX second probably half the have up increases months, on six have -- show days cycle until And to price It's that say we buy-use next sales cycle. why average. of a a that cycle to can year. our maybe we nine won't stretch

question Deutsche next ahead. Clarke line the from Seldon your with go And Please of is Bank.

Thanks. morning. Good Hey.

that get to that leverage to Just could clarify be below level to Or And you're the that's back X.X right to back target, then of on scenario? you meaningfully going to in plan, you're X.X sort and leverage comment times times if M&A for where that comfortable willing you then your goal revisit M&A? your just implying things up bogey bringing would whether deal? lever drift the the that is and if

buy are think this bit out we were, today -- I would drift we time. it, are of the then ideal quite be extended ideal, be ever even in don't below, any or is nothing where as frankly, you we exactly we situation, a ever where to we to and mean, where up. I period want works back would stuff down and we for and plan

we a we bring years. the position ideal improvements then available. what's cyclical a situation. we be to if come don't But over to have may in like We of to than lever to leverage going for times that X.X as the But to shorter be something to it think go we back time. that's know would it our lower is to times amount we in been X.X business we the business, down. to what's can going intention a above ever and fruition, last in of that were So couple stay buy range And a

guidance bridge then just cash could based about way And to just on of right Is then? flow million it helpful. the repayments. you gave think increase help you us -- maybe debt sort to $XXX free That's that delever the year Is the your expected and right Okay. EBITDA for business? your strategy the to think about now

Yes, Seldon.

debt So of repayment. our yes, this all at free driven being flow to point is cash

caveats million $XXX couple appropriate. A that of $XXX is So million and there.

also mentioned, would it year be. capital, what actually $XX said I CAPEX we're our $XX our expectations the exceeding spend As the typically working is by is past, to than I for Karl say -- would has in this much million year. our million it lower

benefit over capital. So be of million from we'll $XX working

release So those items not are we've in two the that necessarily quantified big before.

sure in just that I want So you to that capture make your model.

will some from kind double-digit how as imagine single-digit of recovery is look when you of a slow could there more level? have declines scenario, sort sense shape I when meaningful at you the do increases, sense seeing under helpful. realize could I just Or really least? But back in. consensus these Or you think That's on And thinking between relationship Okay. look more, of a parts take the here. line Drainage pricing in step and if with there's kind you -- when lot a recovery in of assume business, your of then volume shape just moving and a just at squeeze one of about natural of sort a it the macro in maybe pricing that how we from would sort the turn volumes of it, a gradual high if this here, stop I positive?

in tremendous remains Clearly, macro-environment. the a of things. So amount some uncertainty couple of there

tell this you step to safer just workplace. volumes, that thinking a back So want continue We're to but focus it going relates on also as we're things looking bit how about I the other a to to at. we're little becoming to

in stable than -- of our businesses were at suggests Both at a are this in year last demand backlog total. level they both higher Our the backlogs time.

to than year, in in disappear. higher we but will time, next last the increases same this But double-digit the moderate be that flow we at business. backlogs the next were carry likely the through the near It to So Water that suggests pricing as if is releases. year think future, not it going at today future. quarter into are especially our We pace, this won't near they see in these momentum in

quite make to a because and significant our we're to both tremendous our have iron of promote improve to on over in improvement. and to S margin be businesses And our our ductile investments continue in sales execution. G&A product. time. believe to is resources in we'll opportunities that engineering to We technical continue concrete our make so drive the force significant business, conversion our productivity help cost key we amount can that that investing focus in to over our The And both improvements we unit value really volume product our going

and volume know just pillars. these I about as underinvested thematically say sort I thinking would execute what I this more on next it's of but than company, it's as that's year. question, more past. a volume we that than And As think in going an it's bit just important into But the a a five industry we've in we're

helpful. the guys. That's time. I Understood. appreciate Thanks,

with Mike line the of your question ahead. RBC is Capital Please next go And Markets. Dahl from

kind that to but on businesses Thanks order Could on comments. elaborate just two job And wanted the you. basis? front. just in continued Karl, up of I the you between of for on on backlog progress margin typically terms remind of on in also us Nice a taking my the the differences much questions. of magnitude backlog follow for tonnage how maybe represents the overall, increases, the

Well, what I -- are. we've have never on detail tonnages given really backlog the our

good think total business. gloss you I'm about sort our over But asked So percentage the that. of a question very to I backlog going a as of

Drainage little Our us out, backlog quarter of good view, more sort good six our in gives backlog us our That's nature bit out. view pretty just gives about business Water maybe it. almost pretty in a maybe a a of business months our in the a

means. percentage single exact to the both. up, and tonnages it As double digits being not far in shy But It's it's as want the away what digits. of I'd from on that

may expect Drainage Okay. the results a little into But second Thanks. as And still in dynamics. on appears it the This think know a I XQ yes, it bit still still it quarters -- And helpful. it's then you -- a Phase be I -- you like this. of deviated Drainage some in just these question, I That's couple or phrase quarter of it's from expectations. side. and still

if XQ a 'XX can here's issue, So of confidence kind customer any dynamic? a specific or that what's this in declines as, out I'm you easing. call specific or from curious customer different changed hey, there's competitive that area, anything about And the us that gives

actually that's a question. great And

we us. really and markets we We South negative gave in other Texas. Texas competitive behaviors. any on that our regain and a seeing at begun a have give certain prices, was in and little our Texas, not more in Florida color haven't for North than higher bit effect regaining but happened, up, we're not And specifically was Central where temporarily position seen it changes that the we're It our the dynamics to big market. To it actions Texas, in

the margins, I at Commercial share. comments, some while margins. commercial in to -- improving we your the can and And of your and in that is anybody, be raise take any least it's share. in gain can really part leader able important skill. being skill share prices That unit retain important market and market also unit a doesn't market lower California, opinion, -- lose prices what's my Anybody think but

changing it said, yes. before this commercial again. are an quickly the are and we for value temporarily like really up. volume, -- regaining for what an when but execution, happen expected when And effort, -- gave you'll give we we but table this A won't not comes I And capabilities So ourselves that's on not to A be to

next Instructions] Jerry And Please line go the your from ahead. Goldman of [Operator Sachs. is question Revich with

morning, everyone. about talk the key wondering COVID I'm Obviously, you slowed on outlined call, down you your across Karl, look in Good the the inning efforts what areas? you conference can pillars first you at progress of as that are the targets that of your I'm give first some areas you step sure take the But organization outlined key on on had. you you've and a an stands us on mind don't update the that where if maybe back call.

Sure. subtlety. it lot creates With innings, nine a of

So of On we a X and starting. to reduced first it complete down would to one with we're say, being X. and I X near-complete X, a scale being Jerry, safety, about

We are making progress.

businesses. different two have We

journey Our further the Drainage than Water in is business business. our much along

so is business say Water Drainage X. about and our about one let's is business a And our

X, just our means to it's be if reduce in still I'm operationally have excited operations, lot most to has many Drainage our understandable. of and but competitive a what have we and is averaging, opportunity but us more bit they our still is done opportunities. have Water is opportunity. a Drainage business to In business I the apply doing there's and means that area. business mean, transformation front would our in probably -- little it they guess -- business, more touch in we're -- -- process. that steps of the on there's In textbook what in business, say enhanced do. you're too, of they It's but separate X able did somewhere has it's very When markets, I we're the people, advanced significantly it's many than what again, about So X. even separate Water there. that maybe they X.X, Water that commercial, a how that in work Drainage, separate actually cost conversion quite bit comes to to our dynamics. I made stunning competitive But From our

the so really of still it's to have business. very take From of bit still I have X, still here. We done they're made a So less but the -- be going because probably probably X-ish. time. three From still X. And ERPs. our at say There's a mean, job made, only have. we time We standpoint, progress. a a to X much We have a less improvements we're taking there's working more about good to fantastic more can ways be over we've and I to G&A out capital we've to capital still working effectiveness, do, we're would you go. but do

We front-end which to in and our processes, Drainage system That bowl now. business, right of there. a lot highest have spaghetti have we priority do a a is of work our is

quite still is lot to And so into actually company, lot say front We a still that of in would we're I exciting. and of out exciting. as of a have put I stuff that if range a say, collectively place, a ways X. do It's to would There's I us. self-help of all in that probably X.X go, which is quite

XXXX And margin Karl, commercial the on that is excellence. enhancement note, big year obviously from

progress should margin gains? thinking think Or the G&A 'XX, opportunity are benefit those we in tail significant about and manufacturing efficiency longer the be we that line from margin dropping As gains down expecting to efficiency are about? you

say at enhance improvements under clearly margins. some as And like have we pricing We not process. the levels be stable, would Yes. this to for margin extent it's going that have we we in operational relatively that, carry momentum improvement just hopes, cause of we're stable same relatively I do the But almost did actually planning will have said, to XXXX, things hopes. not -- macro And XXXX. or definitely assumptions -- through To COVID in the plans unit XXXX. although we think will things in our we keeps over expect doesn't not into I

is question next go from line ahead. Matthew with of your Barclays. And the Bouley Please

there? you are Matt,

open. is line your Matthew,

hear Wait. now? me Can you

Yes.

Okay. That's odd.

Sorry about that.

in about the the wanted And factor a if presumably, lower that of when of assumptions implication guide us But around fourth the you've like you it I ask apologies for end was the revenue QX. missed and what it. range seen earlier in walk you thinking a can, gave a guess the curious toward slide. But had about if there is you're just And to you could bit I seemed in So natural or you And wide if that? I an weather about of guiding so quarter. far October? it talked higher

there, range high Yes. basically We would into not EBITDA It's backed the be. associated Matt. the math what volume took and

raining window You're not we of my there. that's the $XX to EBITDA weather worst We safe factor for here the range reasonable a so big absolutely think best. in a for Dallas, right, plan it's the for my But hope range us. say and outside million October, And out now, in given it's is favorite. put that I always right

trying to I'd to too say about talk not not that. more weather. prefer much I'm So than

factor this go think how to regions. things But our a we've conversation before. had it I as across many of that is especially time year

I'm clearly if Okay. Understood. Thank there's you're successfully the a then wondering second. think for reset, that. undertaking. to you kind And after happens what big way of about which

Or is of reset Just future, kind you. appropriately inflationary of is at think to like past increase? guess, product happens Karl, you as get you pricing? always be So opportunistic point the an the it annual Thank you've a what that certain idea when I in type going this your price sort this?

think I little differently. both a bit will businesses act

dissimilarities of think bit of after the a the business. executions. aggregate It be top of think the compounding business Water probably, a I a opportunistic a well-structured. mean, more lot steady will bit ends And business has year on similarities. being like I It's similarities. up just after year. say, also, I Well, yearly year I lot but Drainage prices should

that is similarities of think compounding the will the what steady provide and environment I just price for increases. one

Matt, the Karl important in and on question, activities. that still me, the to last have, self-improvement side lot of we things the is other fact a cost room as One indicated for the of

see, continue places successful pricing to line to seen won't but certainly if take, expand expansion I'm So weren't can going we component, we've an and we get that margin that type this view important we that year But that of even margin. the in in growth getting same is bottom which have is compound excited other the forward, fix that Water. actual pricing, we we

line your Capital. Please with ahead. comes question River Richard Evans And the Mara final from go of

the as See you cost G&A -- reduction in

we start -- you just of Sorry, the question. your --

around Hi. on long-term some I opportunity G&A could was the sort if the just of side. cost give wondering guidance you

one several if what's you fast-forward you're take is getting a of and optimal can everything your you've G&A secondly, you line setup? got cost of do you I If sort think you're that of in there? and And world guess, where in years ERP working, cadence how system, the out much

you give will it. I but best shot question, my Tough at Sure.

you First off, for any because can't simple is told a me has go G&A than Karl me number this. higher

So the it basis a will grow less business. be percentage as on we

pay imagine, staff you and it, our of that multiple external -- cost, we -- ERPs As supports that IT removing as audit cover far it. staff can a audit the on money lot auditors our who

say business. would this pretty a call, but there's the it's grow -- $X number be I let's million, we it quantify say, to -- $XX So several million -- as it's to And for continue that maybe me there. to sizable it is would on hard

we turn if it. about that costs we ability the talk rush cadence, to money systems, around and it As remove you

So G&A. the right our do earlier most we about thoughtfully. create fix trying and trying very pieces talked that to are the the that most front-end Karl now We're system. to challenges add

than supporting I also faster quantify million better of better be a to as less I general want what expense. hope broad we could see and information can wouldn't that. I opportunities. yes, growing much business hope we'll be that do at as But it now. business with growth I beyond and terms, $XX right that lots the So

in on improvement continue reports. show certainly and focused So these to we'll we're something

process is it Great. of it move But properly? or is it to I a X- a X-year sort like Okay. mean, do to X-plus year process Or more down?

I don't to and that. more But push yes, than X- that on think patience in I'll range. X-year, Karl has him shorter

over for to no queue. like management closing remarks. to additional in I'm showing I turn conference questions back would this At the time,

operator. you, pleased We're announced Thank we today. the results with

achieve improvement it belief Their there's be both. continued if I Charlie inspiring do call we is we us as the can all and it do end on the company so our fellow our However, five by team of would began and more pillars. in realize thanking still much numbers. to remiss what not And we to

next forward XXXX. most you to Take day, So thank our look be stay all. good you. to care. It's -- We safe. more in a a call pleasure and Have with importantly,

thank you and gentlemen, concludes the program. Ladies This for participating today's in conference.

You may now disconnect. Everyone have a wonderful day.