SPX (SPXC) 4 May 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the SPX Technologies Q1 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please

hand over Relations to would Communications. like Clegg, conference to now Investor I Paul the VP and of

Thank Chief our President joining Chief Thanks Executive the you, Mark afternoon, and today With Carano, and our call Lowe, me on Officer. operator, for Eugene are Officer; good Financial and us. everyone.

press market close. after release issued was today containing A our results first quarter XXXX

will of to encourage this at slide You in can our follow presentation available earnings until website a results XX. along find disclosure in on our live a as GAAP slide May spx.com. to review an Relations the webcast the Investor as webcast and during link call presentation website release replay the be and section with you A of release well our prepared our the and discussion remarks. press of to the I of

presentation to factors Please are portions reminder, comments forward-looking and a most our in note subject and also SEC recent of As filings. provisions. harbor the our safe risk

Our will largely to results be will continued today results adjusted on of comparisons only. the and operations financial focus comments

the historical to You measures can GAAP to today's in of their find presentation. respective figures adjusted detailed reconciliations appendix

security. costs, share acquisition exclude equity Our expense adjusted earnings per items, and non-service strategic mark-to-market a on primarily value the an the of transformation gain pension and amortization changes, change in

the William Stock will with coming Growth meetings investors including conducting Blair Finally, at be in the June we Chicago over Conference X. on months,

turn that, I'll Gene. with the call to over And

thank for us. everyone, and afternoon, Good you Paul. Thanks, joining

consolidated activity. for and guidance first our and provide our an full XXXX we'll you year results quarter. today, recent update an the provide with on call M&A the our on update On We'll for also segment

starting by a approximately more by and both were high achieving Our helped QX labor first our ever combination is of Strong had continued which than our performances chain first helped efficient XX%, margin HVAC, segment end is and strongest the highest very quarter execution results, XX%. demand the conditions. particular, our stable This and markets teams, growth exceeded quarter. supply of for across our performance driven a more a segments in revenue backlog, strength in of our in drive by decade. for results expectations strong

In $XXX acquire more one in a April, HVAC the announced we agreement acquisition an HVAC we acquisitions Together, I'll closing expect rate margin these to heating in hence million our in than these the acquisitions company growth to platform. revenue we of moment. second speak add and about a segment. rate HX our cooling announced recently, And platform. more and run in our of

midpoint strong a company. I'm the acquisition revenue now we guidance our for performance approximately is and at full for $X.XX, billion, are our than year EPS reflecting $X to that to HVAC TAMCO, pleased raising year-over-year our for XXXX more TAMCO, growth a of say to range Considering guidance $X.XX milestone of segment the our XX%. new with adjusted of our

Turning our to results. high-level

of operating Adjusted and with organically. QX quarter, expansion, XXX more our performance margin our points grew year-on-year basis the both strong income of Detection & the revenue grew and results. than HVAC by for For Measurement the pleased very segment XXX% positioning I'm XX% with remainder reflecting XXXX.

plants, our targets. SPX in progressing markets trends in see XXXX As end and I backlog, with confident our feel ability operational a our to our guidance achieve and ahead, momentum demand our order towards you look continue to to we strong across updated solid continue robust

progress to As always, I'd touch like our creation framework. value in on

of customers, our delivery drive initiatives. reflecting times benefits During to QX, our our plants to the accelerate teams worked in improvement efficiencies continuous our hard and

field, and that can loyalty. improve to This digital quality which tools in We streamline the and and and and customers our of reduce benefits our continue applications the includes planning experience also to software enhances which new water labor workflow, height eliminating the introduce need CUES customer significantly solve helps with customers field assessment visits. condition problems Tools which of app, helps tech multiple software, and the AI-enabled technicians while for wastewater GraniteNet on-site, our inspection McLean's assets. Pro And

institutional We've well acquisition that also low levels for dampers Aspect to large-scale is made care PAMCO in known significant announced health we solutions specialty markets. our growth motorized and -- progress the initiatives. such Group. are control non-motorized as On and are eco-friendly and X, data this of in in an applications April with on commercial, TAMCO airflow and leader agreement very announced centers we inorganic market the acquire of thermal facilities. week, applications, and industrial They critical Heating

infrastructure and our platform. extends attractive engineered cooling with TAMCO's growth significant further in within market solutions We anticipated margins channel movement by and global opportunities $XX than SPX of positioning are higher in growth and for air has and segment existing combining our the million this its market average. marketing the Technologies revenue high-quality further and footprint, TAMCO see more than TAMCO HVAC annual movement rate offerings. revenue

the product and our transaction regulatory acquire where which margins. closing opportunities, an of be and electric in attractive this applications announced provides completion markets. than $XXX we heating XXXX anticipate will We revenue, of have currently growth area commercial QX. than agreement heating transaction run The since is see of solutions our acquisition Group, industrial we to Astec with in more Astec in size to will that rate week, more million Heating of the antitrust largest decarbonization. high-value electrical double revenue This the late approval, including subject an higher-than-average This anticipate will for and we spin

shareholders to to innovation, Marley we opportunities I'm about distribution for believe efficient Products our significant the Through growth Aspect and TAMCO excited drive value including combination customers, customer-led both I development and Engineered of very next-generation customers more business, our for positioning alike. the products. and provide our see with segment, voice create eco-friendly and Astec which HVAC will tools that value multiple channels, of of the opportunities digital

turn discuss I'll more to Mark to results in call detail. the now financial over our And

results It The historical $X.XX. adjustments Gene. adjusted was from quarter. year-on-year by practice. In our XXX% to QX, are grew GAAP covered with Thanks, Paul, an earlier consistent outstanding our EPS

$XX.X increased revenues were acquisition headwind and growth Measurement strength in of with HVAC year-on-year, income Overall, million Detection & points. contributed XX.X% FX modest in increases our performances grew XX.X% Segment by both X.X%. Detection & of basis operational ITL by to or XX% HVAC growth $XX.X XXXX April Measurement. segments. was in increased and The These while strong XXX a organic margin including driven million, inorganic and

over to a XX actions our tailwind Price/cost months. both the in margin last due remained segments primarily pricing

our and year-on-year. XX.X% growth Cooling a contribution and was contributed in in platforms. quarter, FX HVAC segment, by increased the volume of both driven grew revenues modest balanced headwind. both of price For XX.X%, a Heating organic to

the cooling During stable in as a operational we income favorable reflecting plants, improvement, chain margin quarter, and by continued points, XXX $XX.X favorable higher supply Segment more and result particularly on basis operating increased trends. drive million increased of price execution conditions. cost process and to throughput in a strong our volumes and labor leverage

experienced mix comparison, quarter, despite related which sales benefited price/cost. margin. from million experienced also year-on-year quarter, In QX, in in incrementally segment and and again By this we higher QX we labor our to XX% our income headwinds up sequentially business, of parts prior chain, QX. cooling high historically aftermarket $XXX the an strong segment increased Bookings remained up HVAC supply modestly to the backlog sales, year

was platforms, Measurement, quarter, across but the revenues points. growth Organic X.X% Segment all ITL For Comtech year-on-year. and businesses, basis and Detection by income our of and of increases transportation. expanded & driven inorganic by a margin of acquisition of The our XX% focused in growth headwind $X.X particularly XXX was FX in contributed grew project XX.X% was strong of million increased X.X%.

$XXX continue We run million, solid at project to experience year-on-year, quarter Segment and Transportation. Comtech due environment primarily end rate large demand and up project a in XX% sales. backlog to orders strong for was

Turning now quarter. to financial the the end our at position of

and cash million our our place quarter initiatives. the Our under of the including from liquidity support facilities strategic to quarter. $XXX we the million, $XX which significant end we available of the remains strong, credit closing fund acquisition, took balance of borrowings had TAMCO growth have to At end, after sheet

remained basis for pro TAMCO, at forma times net X.X was times. a Net leverage leverage on X.X

QX, term loan million closing anticipated our of amended the the of $XXX include to existing on terms acquisition in have our we similar credit Astec With based incremental agreement an facility. credit to

this expect facility on fund We draw to acquisition. to the

cash the nominal the as bulk we Following flow half generate year. our closing, to times subsequently typically the a second our expect the the cash Xtimes was approximately quarter to adjusted ratio seasonal the In flow of second in end for quarter. then use and patterns, annual free declined of line with typical of approximately X.X year-end would by we to by increase leverage

quarter, for the last expect we generation noted a more full XXXX. to to cash year normalized we rate return of As run

on guidance. Moving to our

We pricing, trends, a adjusted to strong anticipated Segment midpoint XXX solid HVAC segment the a approximately or increasing segment, combination is the HVAC a anticipated range of $X higher guidance XX.XX% $X.XX approximately now performance and our level which XX.XX% acquisition reflects growth and revenues The a TAMCO, The a than revenue in or a at to year-on-year are range execution year-on-year increase in excess XXXX operational starting new continued margin at of In of reflects our strong backlog, plant of both in to the points $X.XX. approximately EPS high be and midpoint. cooling of of of demand we income improved to margins. heating XX%. increase basis midpoint in has the XX%. for year-on-year at anticipate billion the of

or we of our X%. to $XXX anticipate range In segment, a Measurement approximately million a revenue year-on-year Detection higher increase $XXX modestly in million & of

full expect We to the with respect for we modestly of expect typically adjusted We income lower be be cadence anticipate second weighted year QX EPS year the quarters, half of year-on-year. earnings margin being our sequentially case. range quarter continue in to highest a XX.X%. up but than to is to QX would XX.X% to the the as segment QX With

as reduce financing acquisition we Aspect We currently periods anticipate clearance. impact XXXX, costs to we'll modestly guidance expect in to in generation. full XXXX would to the subject we transaction. subsequent intend closed, increased QX, accretive the cash acquisition, year antitrust our late business be the half to second interest debt closing grow of -- associated the of and we accretive with update Including the increasingly Once Aspect the to with reflect

considerations in always, As modeling to will our presentation. find the you appendix

markets the to turn end his Gene comments. and now review a I'll closing our of call for back over

North business, Across businesses, industrial overall. stable the America more and APAC heating see demand by residential supply solid In supportive Thanks, Mark. driven in growing XXXX. Measurement, Current to of overall for our replacements. and our market rate the cooling, have conditions is some project remain HVAC And chain environment for region. our continue been our remainder labor variations commercial outlook In & and our remained bookings regional with remain while for demand HVAC the of demand and products run Detection steady, orders strong. in we

with pleased confident for execution value updated team, significant on about towards With I'm our forward the the midpoint. key our our summary, our our our initiatives. capable year. year-on-year strong I reflects creation to at value targets which excited road approximately drive drive we acquisitions to full in SPX through experienced to I'm strong to In opportunities continuing and highly start momentum, XXXX growth feel year executing a map come. continued XX% our recently good the operational guidance, announced see look backlog very and on years to I With and

the Paul. to I'll with And that, back turn call

to ready go questions. are to we Operator,

Karas Instructions] with UBS. Damian first [Operator Our comes question from

work. you have the just some trends. quarter as elaborate talk order start market just best evening, Good you from Gene, trends first -- April. nice on to I've the so you about into earnings the seen the you've Maybe outlook on and to we could kind that I maybe comments with brief looking moved could Really results this seen everyone. the and us of like update season. say, just made

up. stable slip things all? seeing there's pockets where overall may expansion Are be maybe areas date? orders some where you to order or highlighted speaking, generally You there still any just Or at

Sure, Yes. Damian.

platform. we're what I I platforms. about it to way The the break about I'll down across it, that think overall, good our we feel really think seeing

if HVAC, So just largest good HVAC which the our we platform, start really drivers about feel cooling, was demand at there. you

of quarter our the That's strong office we're grew there, saw, As portion in buildings. smaller you very believe very we a positioned commercial actually had our business. I a relatively lightness we one I of there well there. would but area be would backlog. say

We're New I'll seeing storage, the a data at center, But there. not and education. commercial very if might be mention at highlight around markets, institutional you drivers semiconductor to of battery X%. look other strong lot just

about very And so good that, very with 'XX. frankly, and we 'XX feel good about

will I similar lead is back get its think a As heating, more cadence getting heating we're to where to to in starting year, -- the just then in we market winter largely backlog we're an that more last times getting impact about the normal door. will the whereas we're and grow. product much weather us, is on And winter, out had so have

But we're shift. we've previously, about some as share seeing, overall, we've talked nice seen

really know then a our And you on positive But think think our the winning The strength strong, of are is the we are success we're for and two-third. business about and that about the run there. if is run projects 'XX business. we're replacement you the Detection Ecotec very feel very at looking frankly, about across way about last projects all talked market. usually we the about this well, rate Measurement, rate feeling we're having 'XX look seeing in market. We The I heavy and about the heating very into year one-third, which products and good what as and that. yes, is is platforms project

pockets getting, I little some rate, are bit that business. a pretty it's feel these of a continental There some our see little are the run large Europe say, That's And this early we I think stronger. small is about good would as the year. are would There looking demand On flatter. pockets portion today, like building flatter, steady. about bit say that I and the projects. into that we very we're a are we what 'XX, particularly for we're with profile But backlog even on the wins

if guys feeling positive like anything Paul, And have add and you with we're seeing, what going you'd we're to to overview. Mark or this

the across you large No, sentiment coverage really is positive, I think the board.

And helpful busy guys insight. really That's been quite obviously deal the front. have you on

say savings? to business, to If how about opportunities boil you would potential TAMCO drew you foresee had you with integrating or you them what do your And just cost cross-selling things down, and thinking aspect? most

shared Fan right I'll TAMCO fan we're was sure. year, with Sure, And nice in We as to start. a other with opportunities and things regards pleased the movement to brand. how Cincinnati there. then good There's Strobic is business. Cincinnati fits the procurement, actually last you very there do what we particular really air with see acquired synergies, cost some very We're calling know, nicely also next business. nice overlap, customer very engineered Strobic.

amount levels. much the the high similar tend centers, channels the things and TAMCO, things higher applications. thermal Strobic as to low like of be has have where performance Those they which are with the pharmaceutical, more a Strobic business. very our care, requirements, are harder be leakage These of health would that overlap data

managed unit. the be and will reason this same by we're -- these So the bringing business

responsible who's TAMCO. Cincinnati Strobic fans leader for be the will also and for responsible So

see side, on the more opportunities synergies cost but nice side. see on some importantly, nice we some really So really the growth we

really So it's we we're very TAMCO, the think team. nice addition excited about to a

very positioning. With team. Astec one like It's their This been target time really our the heating high-growth regards We spin. Astec, have really has high-margin, We number to strong business. business of positions. They in like good the really since business. is our a the a competitive

that well great very, have in We market. known is the very Deco brand trade In brands. the there is

are we're heat at -- steam overlap don't very them there. story little. ESG heat. industrial. Industrial don't we a great of gas mix Interestingly, lot complementary. very growing really actually nice have product they really larger And and their commercial is if because a is lines They of have electric They with largely the a and expense

more. and And so you're seeing more that

So oftentimes sell we this OEMs. product often. products. very larger lot positioned the revenue. customer in with They grow going think that market, they to it and you of the we a recurring don't get just customized what work believe is on lot And shelf very of an Astec allow A get basis very have is for design as to of and do product of that's They become what faster. is means kind them engineered well

it's it's look you it, we great We're when a excited us. fit -- very at for and a both So Astec. think for TAMCO

I will Rodino obviously, a TAMCO in we've but highlight. is definitive signed now. closed, Astec that's Scott agreement, right review Hart

of being really towards So track down would QX. the assuming closed, anticipate we end that things

together. that fits details plan this very, more a with at in overall, and point time, And how we're on call having into bit all very But -- here, pleased businesses. we giving little diving these a

of to about do you had is, well, your we've think balance think debt? your sheet? do questions I this the what one does How

up And as about X.X in below end X.X a remarks. by Mark stated, prepared X times of And always to our move comfortable or less pointed range. us net then year. target is X.X, that feel bit probably as our This would out we've the debt, to in the we range and and little that very

feel are. about And really our to strengthen we strategy platforms. where that good aligned our going with think we are these we X and very very So businesses are

color. I'll Thanks for pass all along. it that

One moment next our question. for

comes with Blair next Oppenheimer. Our Bryan question from

nature segment netting really seasonality little HVAC the to the about from forward revenue A QX if revised start just I beat on evening. given the we the more in you just to QX. color given And year. Good curious of think you. kind offer particularly and the your should fantastic of outsized framework, Thank wonder how a going and can performance earnings about standout

a to we our had I on business into I'll was durable, the a then may HVAC in back strong quarter. just as you cylinders with It's first look to performance QX, in HVAC if QX, performance And I'll but and kind turned of things we corner, very Yes, minute, all Brian. is be that look was start because really or really such given sense the not been of hit starting interesting, that about out to start, in have it I'll some strong case. may talk maybe think the turning some it

QX, the the woods of think we in stabilize, that it supply I really we didn't earlier environment the and feel were that labor environment about for being. year at were in out we I like the think chain time began continued has to least improve, but to facing the

that we've a We deploying incrementally capital of And the but in efforts that cooling really what improvements really there I doing than focus particular is some platform, of been the work. employed then the an and years about that are some lot across call CI we we're to area structural talked business. the prior of have improve cost higher of driving all would

to So with QX. a for, us strong year, last really combined us very actions that, benefit price from set pricing the cost up frankly, creating a

unique that in around a was again that had And some year. throughout million or that quarter. operating something in income, referenced was a we've of dynamic circled There of my necessarily $X kind probably comments segment aftermarket going about at that we recur to work I income of you That the that isn't will, prepared benefit. if

we where opportunities some That's unique there, some sort of SEP we're opportunity and and aftermarket large related fairly projects. some substantial to which a had

guidance looks quarter that the the forma from kind you that full call to where a margin I in is perspective, range. you've pro similar, out, got if XX.X% for year, our of it, think, very a So

we're I balanced. to opportunities that pretty you look weigh would We full there. of view tried and that business listen, out year it's there. and forward kind guiding good our risks I what the are to say, We've both the the kind and cooling the then the then think take if and about feel you So of is performance.

season a late back to there But the actually is will more that throughout which be that place good the to I take of heating QX to will think heating that continue be that QX. state. thing. of largely year. steady normalized, in going flip the we're tied side to our backlog is and The in into strong We're a business here has

those drive depending trends So on business. that that will

of D&M, with to near-term to respect business then the kind opportunity with a is our in it cycle is part right? short And and economic good that the of project in sensitive the we're position nature, And environment. there, our businesses,

optimistic half back the around that look So year. I business think we're at we the as being of cautiously

that hopefully, think how as gives we the and you to So full year some about in particularly color the half. second

a in little here. health bit I'll just modeling of jump

As We had as That's fourth call, year, Mark we higher revenue, more said and the on those backlog. were a because part last be earlier, not quarter is the gene will of Gene dependent of dependent in referenced typical, quarter. as lot the largest the we weather. course, on we were

year-over-year we comparisons, our when guidance normalized to, So more winter year, when long-term we're of full model, going going you do in quarter are call we assuming set for the in year. for fourth to the this a the

the the and and only similar would as year. realized last the is add we what let's are call certain look a have back quarters, more for The mix of year Measurement the so look we closer you projects margin would thing timing in back with more half of where of in associated half to saw the XXXX, them Detection at the progression that I margin year other that & projects the to of it

Very Okay. helpful.

if I planned the has time modest And there. X, closes actions quantify acquisitions? year to similarly, full what's missed most being and lift the the quarter, detail, TAMCO end back importantly, looking X for rate then year run sorry combined team creation on in updated the from and some that with the accretion aspect the a or but debt baked by the forward, half? your in And paydown the a And what second the guide if of in is accretion perhaps

on X obviously So in respect With cost you that of think to But we'll detail that combined the to this. more did more these impact on businesses, off you hold magnitude here and going $X.XX, say over thing and to detail quarters, We for the going of those one that's into yes, fine. we're impact overall if TAMCO quarters. part say I modest the That's acquisitions. some across to to Brian, include rate when just kind of it interest a give think two could aspect, it, get run I giving of came we about more that.

close $XX we rate for $XX releases, of company million. combined Aspect becomes the together SPX, expect Once we'd up on million the EBITDA approximately annualized combined it those from and average. businesses you growth transaction, to and would picked press for above two also be TAMCO a part Astec And the I think our

XXXX 'XX should read infrastructure for spending the we reasonable through that? and businesses? expect project and Understood. beyond, likely a I well, your sounds appreciate and detection And outlook to the If it last run like as It where the what year sides and there. then is look both positive. catalyst near-term rate sequence in we color into business later see measurement, And is one. trending

the think, I interesting. sort Brian, infrastructure is of spending

front on dollars think, I being seeing come end just, of are We those the through. of some

the my is really see to back year half 'XX. and at this begin expectation So of that we'll into

nothing seeing some been there's the near is business for just I use a dollars these term. there the -- go, dollars all dollars in, available. seeing, transportation that the one has with of money our dynamics those those think not everyone in We to think if we're I there's allocated, But that it's let's example, ready say, to project are of

to more maybe I relative into what everybody benefit. that been has it's in when So some, year thought. we'll is half probably bit little it's see a 'XX really back the and delayed of this But think probably

you. Thank Understood.

as our we question. up next One moment bring

De Lawrence comes with question next Our Blair. Maria from William

everybody. afternoon, Hey, thanks. Good

Obviously, just pattern? So become at obviously, the So a priority cadence yet. here. curious after and is forward? does going One, unclosed I'm the holding kind two question just begs D&M deal the of here. this about questions staying And also, deals there point? on we Are digest

there. Larry, Yes, I'll start

over quite really the really segments changed a I our And we where think six years. said portfolio always we we've sit and bit platforms. has like our like we today, both

D&M deals. done have more We a lot

see were HVAC this like both more to we've it about that I I typically is, think You really very these your deals been of them. of way about But levels. in but careful We -- the these think on question, debt if smaller market, opportunities.

have think at the where of X.X be to X.X, deploy. still debt. year, we'll capital about You times We sitting end the

log. We have a robust very actually front

I think have bolt-ons. flywheel, done these we've way a a we that that So

As you past XXth Astec would know, be several our the acquisition over years.

like that think out add having else And still are don't there. of you Paul, said Mark, I cognizant and know very this anything I But careful we levels. debt being that, to on guys topic?

within Gene's think I sure leverage business. for that sheet think, going we I that I to year. we decided mean Obviously, levels the this event point, very making the in something liquidity later we remain that the think balance there's But there. out are pursue significant to be here appropriate we're about to thoughtful

color makes Okay. obviously. That's sense, and good

rest just off tails year think through you cooling? on in the important said know the between out quantify pricing about million. it let and you year it, maybe that contribution of the the D&M us Can how we and the you plays obviously, how whether think $XXX the the there how just obviously Can price quarter. HVAC pricing go And about I contributor? secondly, backlog was for as mix in then to to comps? backlog and Or was think heating

it or XX% if At the XX-XX, you a this something on first $XXX look up the about cooling very quarter backlog little year, point, at actually the HVAC growth the strong XX%, HVAC, middle which of quarter. So results of last so, XX% question bit, that actually in for from backlog whereas, the that in the have now that. was million, fourth despite been is at was like respect backlog to would with

us the there. levels of So backlog, just heating seeing normal to closer a that's reflection getting

question other on, price. was I Your think,

you at more were quarter and volume price-weighted was we the but was XX-XX first look D&M volume If evenly, more price about were weighted. price volume HVAC quite and distributed, not

XX% would for XX% around the a let's you across XX% growth, price. to We As be that X% bit or look of direction, percent our implies X% X% other or X% volume, another that organic. guidance it flipped in look the year, acquisitions, call little

Okay. and color good share. That's really good luck to

Our comes Steve Sidoti. next question with from Ferazani

it on we've that's evening, the comments caution one pretty sounds of to as the lot And the confidence the companies some the I the in like But earnings you beat of second economic a reducing orders terms lot what developed into I is quarter. releases is half, some Good know half. uncertainty we it to me, of a what But be of caused stronger quarter big fourth is, given your since about difference bookings second clearly mean, handily economic concerned. gives of echo uncertainty the everyone. seem QX. concern. project given being the don't seen other just you

look have very Yes. Steve, at the side, you on good into I going 'XX. we and for visibility if think think 'XX even HVAC projects I

more I'm cooling the on So talking side.

severe be and that don't we So time there let we a to us and amount recession, really If it is not have have would And only hit work good good do market. would a we recession, very say they this through it year, would backlog, not of believe. visibility, a high some but bidding. take

to, a a that at year. that's alluded the business if we've grows business, business. percent as a you to be of more that That's think I heating going look much normal

little bit bit. down weather a the up a market or can then drive the And little

impacts winter in the weather TAM the of the the season. So market

a that normal And a like pretty us. And so the is normal will normal for level year be looking a and think channel backlog of balanced. we have I

most of So is that replacement. as know, you business

side, see don't strong. the have we -- lot you at very a backlog then just it on And we the deviation D&M is look projects there. we on if So of

that we of part about good feel So very business. the

the were run what is of we on the some then and recession, businesses And of into would our I run a rate, half rate could say that if year detection management. go severe in say, the back affect let's to

our eyes be is that in would So detection earliest on. the said We've that area our coal the canary keep mine always radio business. our we'll

to lot that A think our you government They not wastewater are if or for to doing go lighting they as Aton to of buy, more or you're municipal stable. tend But as working a pipes, stuff GDP. of not as you that water don't on think buyers -- you're or of know, our whipsaw businesses be fun. to have regards I with our really lot much or tend to

need You're work. doing to because that you do that

were GDP. testament went and I think our were in. on get recession portion would a the the that's keep our we of be markets most a got on the down a We would peers lines down. XX% businesses Measurement example business were I'd Detection closely some But that into serve but certainly rate and in, flat. recession, And we'd linked a And that of we say went would the to say into eyes many revenues our our if business because back But to to I when during to in shut down the our severe that impacted. of run that COVID, is or everything revenue, recession, revenue all -- go some had world we is I

federal as much that infrastructure we that ballast -- dynamic from Maybe impact certainly, as 'XX. Steve, sure. it's or market, to been I of the add, into that's flowing a but might are the would of while side in ought has not dollars that that. longer, And And benefit spending timing should for 'XX be we the business it like, side to a parts this

this your now. ask terms it's lot be left I hitting to XXXX That's work confidence answer you more in seems time probably time easier to targets much easier of done? Is I a helpful. Gene, there speak every much in a level

to There's always work of to done. do. There's always be lot a work

the side. M&A On

to knowing strengthen pleased you, of we value both help TAMCO really very we tell add these and grow they're are going but with are not platforms and think closed yet, like aspects them Astec. like It's I'd and We our faster. of that really the we we We businesses. part people we'd like businesses. Yes. think lot can a these really to

step So the certainly this direction. take does big a in

it's work. CI, a got yes, very there's of lot the put of a commitments lot feel But like hard with win to that to about and conviction lot a to the going digital of end up There's easy. market. We a close Astec, have in there. not products. we're get can our where But meeting we I as things. there. new that got There's I the push said, think $X, guidance we're of new $X.XX. out good very you we're year, good see before on we lot there, As from feeling to this And I'm our anything doing we've are, we high right to starting of There's and

very that because did significant what I about constraints this companies We from so supply think lot managed chain a you don't having was we QX well. ask of it in clear easing. much see too But were very

chain meet managed growth that, things you bit on the it end? growth? your but constraints labor echo And fully making easier well, you've projections are also staffed supply you the on little given a that Now would are to side,

whether I commodity of in labor probably a woods labor better has like mean, that, chain we supply on it of certain say, eased, availability before. than probably even out was in I ago. There's the that steel couple I competition Yes. but it think a much And a be costs, greater on we're certain from but are can that's the right, times on some and still is areas boards listen, we like areas front, circuit ago lead quarters for a would perspective, year than there, entirely. not still strong big out were markets, input printed front of long much particularly place the in mean, I or

restraint I of much supply challenges there much in both we the you're is talked Not -- better. And as to trend that contributor key improvement -- been still is has those. overall why, there's -- much that performance. operational think that a chain much Yes, a a about

Mark. Thanks, Gene. Thanks,

comes Our Seaport with Research. Walter Liptak next from question

quarter, Great guys. Thanks.

could about of timing. the review wonder I've got So if kind is you just I D&M the help the us backlog. question

year. $XXX around up question up is, XX%, last picking it million, you the think one this I that was orders the said time think was I number? started And I guess

So to in are higher third backlog the or that you or comp quarter? starting second

backlog in of second, happen a Yes, XX% lot your increase That's see right, year, occur it did last third you of the was number where to well, right. quarter. the did and

of and through remainder that some roll the of because of see of that lumpy. a out into little & the bit can this businesses some nature year, revenue of look our obviously, backlog As of we'll be project Measurement the we and Detection in

we're go many today looking and good the sit mentioned. year. for log about not end of front to we a looking think as looking were these that I in would next products at that markets. setup discussions at our where year, this sure down Gene quite same and for we our having doing But we backlog are well Actually, expect I'm quite

and Or great. mentioned weighting sounds both That you And up. the it equally? that are transport or up that was Are those one Comtech a there other? towards is higher both

actually towards weighted more weighted the increase. terms much heavily towards You -- in more Comtech of

weaker, half then, little not then back use weaker more guys Great. a bit back we Can lower about revenue first I half, in prepared the half. in XX% percentage and in XX% quarter, you remarks, your And again that still but the first talked weighting in the half. And Okay. last Mark, that? think you or mentioned a

get If I'll you that don't one. mind,

the in terms I split was of B&M. the you're it the said the we would be that year think So making reference prior more like in

where if I that projects, not off. half, the if would key of back were last those you and to a saw in year margins half, saw year the out XX-XX half. to mix model those is higher-margin at think margin getting the probably far point you important as is delivered were of we progression maybe you but look back larger it's first projects and was of what an progressively the important, the So you throughout thing out more It -- that being becomes -- timing margins similar it the in the profile, XXXX

Okay Thanks guys. great.

Our from UBS. with Damian next is question Karas

follow-up Just business. question heating had quick a on the

your I outsized of your inventories sounded Jen, sense their know large taking you and competitors are. they market? one boiler channel this public supply business for but you're where performing So talked is you And you the chain outlook some past lowered But more stable, inventory had place how like curious what's seeing about think overall quarter, boiler your versus last issues just year. you're destocking

Yes.

actually run business process I do. so talk the I you on every of earnings -- we through lot know forth. numbers of so presidents a the these to -- calls Just the day of all the and and

but stocking, of not think while balanced. where is of the have very that McLean, runs a the distributors, for gentleman I actually all It's not we feel channel And actually who good. it's them. chunk good to sit so the visibility understocked. overstocked. and today We they the good It's not And

just The our place that say businesses is I'd that we are And of can really we the only boilers. cast we're more we rest are handle iron in behind commercial than -- still believe trying still in more delivering we're out the the door where have get orders efficiency back have lead the products a that's operating normal And to channel that our balanced and of to we a times. is normal one cadence. -- a we the lot balanced. But get standard

of Understood. guys. Thanks again. Best luck,

for turn like Clegg I to time, comments. this closing to it would Paul At back

Thanks at today, look joining to quarter the all during call one events again the forward quarter we and of of for speaking to our Thanks. we're you you next or attending,

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