Alamo (ALG) 3 Aug 202020 Q2 Earnings call transcript

Good day and welcome to the Alamo Group Inc Second Quarter 2020 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the call over to Ed Rizzuti, VP, General Counsel and Secretary. Please go ahead.

Thank you. have a should press of you release. now, all copy received the By

code is and we a receive if distribution sure missing However, anyone the on copy a and contact company’s at be the with There and week. X you run of are you one, will accessed dialing us X would XXX-XXX-XXXX XXXX-XXX-XXXX call XXXXXX. can one by be pass send will replay and hour will list. begin the release for make The which please a after call replay to like the

is on a XX Additionally, being the www.alamo-group.com available at days. company’s and call will for be webcast the website replay

Chief Treasurer opening remarks, Ron Management the President up Malone, Executive some and Financial with and will for Richard make we Chief then President, the Dan questions. Officer; Vice Wehrle, Corporate line today On your and line Controller. President, are open will Robinson, Officer; and Vice me Executive

During of non-GAAP the are the call today, earnings their attachments GAAP to non-GAAP release. included to these remarks. numbers in our certain applicable in numbers results management may reference Reconciliations

Before comments forward-looking to like Ron, turning about statements. a make the call to over few I’d

making provisions Act pursuant are today statements the safe Litigation to harbor be that of will of We Securities forward-looking Private the made Reform XXXX.

ahead. the I like The and as to which materially does market seasonality, information currency-related company’s results forecasted actual factors weather, from results. of to contained only go risk Forward-looking listed are which herein, may reports. Ron, to factors not and to differ could COVID-XX other this in materially known risks cause update demand, time company statements cause involve obligation from time competition, results and the date. uncertainties, please Ron. Among unknown now issues periods issues, in the the to company’s introduce impacts, would future actual geopolitical undertake differ which following: speaks those any SEC

joining for financial want provide questions. comments. us we Malone, your to begin to I you with our then thank quarter. CFO, And here second will call Ed, all for our our results Dan our the of taking forward few following look of and formal remarks, Thank we a you, will today. review a

ahead. So go please Dan,

you, The first with and takeaways half second organic Thank X.X% results half as net of acquisitions, down our net were second acquisitions from XX.X% to quarter did offset but were key fully Ron. prior organically. sales quarter not the up sales are: XXXX compared effect X.X% XX.X% a Record decline. sales first down year

percent year, year EBITDA higher down adjusted but prior quarter X.X% as was than prior from Second a of sales.

EBITDA and First percent to income of expenses. and incremental half interest, margin were step-up COVID-XX, with to acquisitions EBITDA over the a even of earnings were the and full year, increased for as down amortization was same adjusted period. sales X.X% accretive but net also again share up inventory earnings, due Net prior per adjusted burden

availability remained $XXX backlog XX% by loan million, operating quarter quarter X.X% Outstanding quarter. cash cash above up million, reduced since year. $XX.X million, $XXX during debt March. was Quarter flow of on hand end end the over almost down $XX.X the was Second prior end million was plus and

were decline of acquisition, organic million X.X% down was Without lower to organic the net year sales $XXX.X due were XXXX quarter. translation, second were primarily currency sales organic effects unfavorable than quarter COVID-XX the The impact. prior Second of XX.X%. XX.X%. Without down sales sales

of Industrial XX.X%. were sales sales with customer Chopper demand. the higher quarter organic translation. translation, operations, unfavorable quarter sales a impact were U.S. due in the $XXX.X Without the quarter. division’s quarterly Without quarter, COVID-XX per organic prior results organic down see organic net sales and second sales XXXX X.X% $XX acquisitions, The quarter. compared company in our $XX.X of modest diluted than down of this of effects the to continued $XX.X million down quarter per our was from year second second First $X.XX COVID was plus decrease impact share. division North sales American Agricultural quarter quarter prior the operations but million pre and or dollars some decline share offset on division’s sales, were million XXXX and prior or and because to record X% of the by organic acquisitions, acquisitions. effect currency $X.XX year prior first the represented operations the net were second the XX% XXXX less this stronger income of year of year contribution a from three Net XXXX demand million, Dixie down the unfavorable down XX.X%. without than comparison second the second for second diluted half were incremental sales disruptions to we million sales net customer currency income in $XXX.X growth Without was COVID-XX X.X% In overseas. to X.X% of of

acquisitions, or prior or to Second and was diluted $X.XX net income per by expense of income share the income half the accretive first share. $X.XX first for diluted from cost was $XX.X share. million year $X.XX step-up $XX.X quarter bearing full per inventory compared half GAAP net per XXXX Net million of amortization incremental diluted interest,

incremental net share, GAAP and inventory from diluted the expenses. acquisitions of burden half step-up including was accretive by income interest, per full amortization First $X.XX

inventory adjusted million, XXXX Morbark which second step-up the $XX.X or the quarter $X.X charges, Second down was million excludes quarter. from year X.X% EBITDA, prior

higher and sales year sales net good Morbark a of the a impact COVID-XX. margins, a replacement of compared sales part XX.X% prior as EBITDA second mix the quarter. adjusted in unfavorable of Our sales in of offset mix net of Higher more quarter whole to the margin than was favorable XX.X% percentage equipment

half than was million $X.X the $XX.X which prior X.X% EBITDA adjusted was half. first XXXX First or year million, higher

sales to net XX.X% margin first XX.X% of for period. year was prior compared The half the EBITDA adjusted

strong quarter the the to COVID than The first of during pre first quarter. the results due current comparison is the portion realized year second half comparison better

flow XXXX During the At XX%. had generated of controlling expected XXXX, is the under efficiencies an million. liquidity flow operating to quarter of end, operating due management cash million continue the prior Strong cash and almost asset availability million of to compared quarter, million credit expenses. $XX.X maintaining cash hand throughout facility, we $XXX emphasis year million of increase of $XX to second second in quarter above $XXX on on we $XX.X and existing

debt we million and debt EBITDA. $XX.X improved of leverage During outstanding the quarter, ratio reduced total to by our

and adequate cannot COVID-XX the full currently have we we liquidity, pandemic. of more While than impact the forecast duration

not first still order near-term $XXX prior the issues. any the backlog, and liquidity lower than ended We of quarter. second of the quarter we anticipate decline do with year second end X.X% quarter since However, a X.X% the million of

quarter Excluding first acquisitions, half backlog are half but second XXXX XX.X% and results, was down with X.X% quarter first down XX% were recap second prior up sales X.X% organically. year. from organically. that with our To net acquisitions declined sales acquisitions, net the Record XX.X% down

Second quarter-to-quarter quarter sales prior the in adjusted as percent EBITDA declined increased X.X% the but a year comparison. from of quarter,

per accretive were for net to incremental EBITDA full also including up the year, inventory adjusted X.X% even was earnings share XX due and a sales and earnings, impact. interest, the EBITDA down the income margin and expenses. First step-up of to as burden same percent amortization prior were half period. again of COVID Net adjusted over increased Acquisitions

availability Ron. above since Second on flow down prior remained of over million, was X.X% to up hand end quarter the million loan I end reduced almost end was operating now the debt of to call March. $XXX back $XX.X $XX.X plus year. cash like turn over would the cash million, during XX% by Quarter Outstanding Quarter backlog million. quarter. $XXX

line indicated than we which flow, we to be. better Group’s strong, results in we were would held as over reported. having well. up we economy And certainly our as down debt. Thank us you, they hoped, given our be came our general, were I were the Dan just in in our allowed but million release dramatic But soft, the reported, effects with earnings feel and off Dan. thought last reasonably against on business COVID than better cash even $XX quarter, press quarter Sales would felt which Alamo pay the about results is second expectations

the very with and performance because of general, in our easy I staff, Given our it pleased circumstances, was proud accomplishment. am certainly no

our this coaster and equipment a that The endeavor crisis. with adjust to And alone were closures, to everyone’s let not working we an know of directives, others, their restrictions roller travel deal home. while can remotely was not and still are businesses than all But from living way better me ride we’re in industry faced with quite build nearly quarter had adapt as and could plant cannot with. all second work We assure stay-at-home you, challenges we’ve I contending to working the virtually. some the

in have similar and most toward products, and needing maintenance in a late know up. is the conditions now, today. bookings And last during in especially lot and plants last and people customers function if ways. say to to the year, home. of am some and well to in I Alamo’s to ensure of the and a lost related to coming our in market in quarter, our just a of more continuing the experienced sectors ability quarter have you two as of first glad basis never we had agricultural are maintained governmental quarter replaced being timely as The entities function early lot on focus COVID the were fortunately, our We we effectively to regular while they a level customers are really our all second oriented consistent doing efficiently. people home. show And we division make mean to from to not level I to so to heavily are operating were on were issues. for And work had from our was infrastructure economically in are are the related work soft to are used The at challenges made at lower governmental continuing extra have we and so equipment all our pace. and that continue a a are new fashion. of be effort initial equipped at industrial open which deliveries than our lower function having still markets people both with and running not a industrial

with So, operational and normal for dealing to communicating business conduct a just customers and in to a of issues in way. were there and lot the them

just that’s were function March, a in of most and late operational issues lot why probably so April, just to And trying of there communicate.

their business in in which improved, types particularly spending on We to most well. more we I budget on other the will our type to able into functioning have issues are we regular issues a side, for which somewhat of are constraints. types the of governmental revenue Since being conduct utilizing to but this equipment, than and governmental we fashion. a believe reasonably seeing divisions shortfalls rest these as and hold we impact of still think we related seeing they now basis, our up customers equipment industrial are and are year will year constraints, better normal not to well next our immune now But of and both will budgetary the of feel be

of new better equipment and in evidence we to this equipment than this existing sales to their spare spend seem on much And be up downturns. new is fleets have they with seen previous often part and repairs have when holding they more consistent sales. delay wear to patterns our as we already even are So seeing purchases,

we things industrial second our benefit past budgets of capital spending the spending. was smaller part by part being revenues, of of oilfield part special most We also the revenues in there truck even the the vacuum in as operations. like more impacts In not areas come was new than bills and This feel will our such their or nongovernmental the and operating areas was even short rental some as greater from a term. this initiatives. government And some appropriations, in such highway somewhat related felt in construction as on normal as off special reliant quarter, spending

if of starting immune it are And a in areas as current follows our should agricultural Farms to patterns evidence more well. division little And results. the the the already have issues, dealer have that us related also generally lower Since period to some of they throughout Alamo’s COVID sales. this from replacement historical have the years. while over actually and the I in a see think this and little due sales as held have for a these agricultural such COVID that demand industry as crisis. for market softness pent-up ranches, last several than anything, However, even better entered spot we of our feel not the quicker several industrial to may up function we rebound levels lower last years. continued we bright inventories to with been benefited

But last commerce, restricting softness and mainly May. functioning little several the now equipment during were farmers in bit came second our Europe and year-over-year which, overall American more years whereas had I down continuing the Europe, probably up on created due interestingly, of all even demand And operate. quarter, and in weakness us for to as April of plants as North the So has in a stay-a-home operational the in short-term well. related and into as actually down, COVID agriculture has ranchers to our sales are and were in issues harder restricting said, general, especially initiatives open more sales

state-at-home feel I that think more benefited fields in also more and the agriculture hobby and bit on in little reasonably commodity hobby their also the all as to continue buy to and the hold sales incomes but to under think are activities And we a directives will cultivation by incomes I should replace conducted land we reasonably steady. ahead their being up holding to on from their prices, and which actually farm moving working equipment the having think steady. increased since still U.S. sector, little still with farmers so I farm well, a are acreage constrained, reasonably being from. constrained well farm operational seems soft are benefit though be we

level of down the slightly to Our they prices new this level quarter they as bookings, ongoing into us long the operations. maintain quarter, quarter from are are a throughout company although which the our below going levels. still Alamo’s to But third running allowed still previous solid support as order And in be of levels the healthy by our was also came the key to production quarter. our at backlog will historical second helped performance quarter, efficient and pandemic backlogs continues

disciplined new priority first that’s where have been versus flow that balances I’m in important So orders of quarter should were performance, healthy we you and and sales once still until they get as actually maintain if back been debt $XX second our This our financial maintain And even well, of and to several to July, foreseeable Morbark, of that the levels the last they need operating showing acquisitions focus million. was to such our the for orders ever. remain are improvement have will Alamo make this pleased be, continue previous our capital report future. key. pleased of company reasonable I progress that June its other the challenges to can despite weeks a including made year, largest I’m is on we are because signs this to cash reduce million while demonstrated necessary up take our we stability. and the by feel limit maintaining again $XX we our repeatedly, balance soft, the which as integrations said actions And to control expenses cash remain have over COVID, over of we particularly manage earnings new our to the for assure action seeing are we also we strong, able sheet, And as will in months. picking the spending,

these as in travel as been lack the cross-selling plants under in of and international get ahead to of supply While or with to technology constrained schedule. moving schedule areas, been slower synergies in and on have Other some chain are ability way. improvements some even such such have certainly initiatives ahead and the

feel last to when of and in we levels, nicely all to will year So development. normal completed each Alamo’s feel contribute business remain overall and more conditions these acquisitions the three very pleased all, we return we definitely with

And XXXX manage was months, coaster people manufacturing you to maintain our want might and as our to would our is that, I some any feel floor confident through in situation. I to I as thank an few have. companies. questions ability As roller I of And going support of the for open With discipline settled us earlier, down this the ride. long the it you of a investors focus quite and your challenges we and be as for the it like last to have takes. up go now climb many quarter second to our the way in said for while But still

have [Operator Securities. CJS Instructions] from a question We Moore, Chris

taking Thanks of afternoon good Hey, a guys. for couple questions.

good Yes, afternoon.

good start Maybe backlog. with Yes, just afternoon.

bit understand little better. a I So

sense year. are quickly slowly, So kind it a backlog better days that to of as mix more trying to And currently been is just last time in to of get have might average sense this trying of products whether versus where by influenced what’s a cycling there? through get just maybe now, number happening the or more

Actually, are the lead so changed has our I times far, about mean, it same. appreciably. Deliveries running. not are

fashion. there’s few large, and some is supporting purchase few the But supply times have a are issues fairly some components. got chain We And sporadic in us by normal. our maybe fairly on normal lead a a

of the And COVID backlog days held a conditions. sales is fairly pre of with up number has so as consistently

some the had warrant in kind mix talked in items Is through this of QX at Is were ones you still different? that selling time. point of You the in where the there big-ticket much case? that the

slightly. changing is That has

things on, kind those they oil little Morbark’s, have Saw I big ticket a machines. softness, the like more great softness both actually have mean like excavators of big and areas big and industrial improved. early bit the think I of some

So, little has items all a a than actually big Ag still soft. mean industrial little improved softer have ag. Like slightly. said, are is ticket I sales been I up.

In fact, end of the quarter, yes, even backlog to have climb. their since the continued

fact, ago, higher but quarter. And was stronger consistent. in couple a I have little than of all than a in whole months a backlog they big-ticket were back better is come Like spare the all, the than parts at fairly yes, today, have it So of end probably up our goods. shown said, items but held little

a But percent spare of would said, up a But spare really mix, backlog do favorable little little which more I more a as And very So tends they quicker. and so have be bit which to go and the parts, backlog would of is that they a of trends sales out mix. on certainly, would that other quickly. it’s little thing, have been because with subtle. favorable be flow parts be like to bit, a bit through higher-margin a than because, much different the it be in

Ron. That’s it. Got jump helpful. I line. Thanks, back in will

you, Sure. Thank Chris.

comes Mike Collier question next from Our Securities. Shlisky,

Hey, Yes. guys. Good afternoon.

Hey, Mike.

companies a progressed about behind being of progression we June, have what of give over sales about Can in information kind of you of that we us be beyond already us some orders. sequentially kind or quantify you other have July have us just said for bunch intra-quarter May Any that up. orders perhaps and given from heard today A or put kind sales from May over would June movements appreciated? or how April, what numbers

were of dealing lot I that a as all with have of were I this think kind been April, Yes. sort said, with. Well, new mean issues. paradigm operational we of we faced there I

people was what ahead mean, and issues more limited I more little to there say, doing I looking was were had operational there as a with only that. think I issues, they were, So orders would that and

better and have started to May, in So get to get they even those in continued June. better

certainly work limited, still and issues, there fairly yet way While keep make operational and like are and to in to business figured out everything. our plants we a they open some have safer conduct ways our

don’t said, money have deal to dynamic I starting they were governmental exactly they side, the and are that’s already are we I as know where a cautious seeing to what that, trying being to mean, a I because they situation. budget are they on think to now think see I and going and much little very how spend, are So constraints with

has that, better bit that’s better like functionality, But we improving. started as it within fairly uncertainty So has more than been like of said, And even from all moved I changed. the up was I May much on steady. little held is April. the May. say, into June ag a than

really utilized back have on bit a regularly. get and business is it’s month-over-month, to the interesting, out maintained each more both improvement normal conducting sides try is mean, fashion. little figure on it worked both how consistent work in and seen regularly Like be I people the to and staying business, business is so as with to of sides I And being of equipment and said, replaced actually being needing our regularly, to we all

are they month each looking already June. that out to now functioning has so lot said, there. be I better, uncertainty a there’s of And gotten is July I still and But can Like better better. than

We we governmental a concerned a that of side. have be ag operational within our I that second little affects of are we that than really on said, issues side are wave and bit Like COVID the got us not customers. more the takes there certainly

they They don’t social have the can’t maintained in long from to they in are distancing their to farmers about their farm, side they some ag have as the just farms. crops level. on and don’t animals field to have holiday and worry to and think be the take I as working a they fields, have

But the I bit working, and get think a going cash harder little issues more with like is functional governmental little and pushing bit Europe during but the for still, a them are America. side, when as and I more I question issues in down bit little operational improving but But with So been, things say, functioning government has back all, even They slower. gotten open they sales than April better. more also And is have a operational are especially I we there and stability came equipment see and even little the all. month-over-month. to like North up. said, But probably really May, there. think but bit the on are they a

they bit we little all now in for behind and been have and there reopened. course, operationally, same they but in the had of but plants are softness we a doing But North deeper they it’s they May improving. more have So here, kind in are yes, Europe a business closed are of little soft in they America, reasons but soft has during all than slower And have been been again, is it’s some okay, the step us April, of U.S. a

am got get to if beans, it. got your by not be be corn on in or year, to less I you that everything this sense Okay, at to, if tended just And more profit all about there All some next that that be gone comments is replacement I year. but follow-up we and extra Do has year land both elevated you it with has year, else coming the look of assuming ad COVID looks versus cleared have out XX acres barley there, it there, work then? prior plan you the a etcetera. million can will on curious, this like

shifting steady. little. commodities Like bit cultivation between on more. to That bit a it course, would said acreage said, Yes. is under be mean, little there’s earlier, little help seems Like prices. a remaining you And I a based I of

for acres helps. mean, commodity of but that little But remaining have prices, if I see have help but getting manage So so bit commodities. if would cultivation, they you ag better sort were under and it they I those those. a you have to to many equipment steady,

are steady last to operating farm fairly it’s fairly the but being been incomes like like soft low think, more level, under the a it’s say, years, level, due so acreage cultivation. a of farms I at couple

think and nicely. would but nice that farm really I sector baseline better, keeps rebound higher of bit little to for that incomes it be provides So a to a see level steady, things

in Richard. be is this acreage Also March cultivation on recall, this that down too, versus of last that, heavy that some Mike, there the top year, you to caused and if flooding Midwest was April, year. in

Right, correct. Exactly.

Okay, yes.

Right.

Okay.

well. over quick quarter, margin, brought to it’s will I am second year, pretty prior well, I third cost in always and that switch too over change the back those just had or there given any then to second were a the admirable quarter kind some of segment certainly be curious, question a markets, less, that’s log you consistent as and see And EBITDA forth? you wanted reductions immediately coming to good temporary between hand to margin the in anything more as which

those Yes. No, Mike, favorable of that but are is margins commodity margin parts. lower a trending are There Morbark being function improvement continuing. It’s the down. really We a just straight costs, some up, higher. had a mix of

goods, favorable that we then in even had a mix. were impact And that So we the have. you the whole know can

were of things You and margin resale truck-mounted type the like think the equipment, ticket, the down the about we some on of don’t big that a have were chassis. big of

and goods. we even of had on goods, So ag whole a whole favorable mix the side,

mix. parts Morbark higher the its That’s It’s story. So main it’s it’s mix, margins. whole

quarter, So in this about new especially top it of if sound business, given up have back third first be well? ramping line the does then you like, having the scale as on even third any more do keep the able amount quarter in a should of margins kind to small you your of

EBITDA a good be we margins all a think to long. piece We of are as going is think story year Mix, that change. small

to availability It question, situation. the of go it. kind next chassis like answered Got on but sounds just you my maybe of I kind can

had folks that other through during to and I good passing about you do time too. had As today? those a when things, of [indiscernible]? feel recall, attach you a how chassis the inventory still Class obtaining case not some chassis A And may have all Is

Yes.

chassis mean, has availability held steady. I auto thing, and down. were I COVID been So in up shut plants fairly early far, has truck know like several the the

where inventory And back and that to in we today. opening had availability issues. that, had issues said, mean of holding special had most consistent and no seems our right be hard have and we I one-off market other mean, get, now, own have fairly general, them the chassis as one yes, have think availability, decent to all. but I one I supplier was major I than we even chassis, but truck and that between are of

color. I Got back it. great That’s hop in Thank you. queue. will

Thank you.

Our Mondillo, Joe next & comes from Sidoti Company. question

Good Dan. Ron, afternoon. Hi,

Hey, Joe.

Hey, Joe.

what to government and there. I ask So business you are hearing wanted about the

along than, unclear. And be you are to of is. to your business what back budgets, terms you some – just that sounds worse, really last almost it talking we second case when gotten the down but the say, further that’s related of more saw government it the you have a it your expecting customers the Are that, talked and worse the gotten have further or because and in the the wording, of where little then line we to to is with like things compared point is just it’s the So things volumes sound year the to and that in case a it you just at is little a follow-on are half expecting of have end quarter? in April, case gotten

I with is unknown. No. be customers communication not And necessarily said, know. things think, said, I a they like Like expecting improved, situation but budget I big we are worse. don’t has to their still

are in have orders getting bit April, better better said, know. month-over-month in don’t they better. But soft been July. better seems in they like It industrial, were I May, in be little And looks month picking to each up I June. running since very So even a as

some government this know, kind than federal I worse anything as like is governmental challenge. are that’s stimulus to it’s budgets going don’t to of to talking going think next have a well. package states. about you that, And bit of is it make supposed it a fact I And other toward money think said, the orient I to that I necessary. is bodes see

like do sooner say, think I don’t do. I whatever think and rather they just have that they yes, But later, I hope any particular it I than I concerns.

I But there soft, budget steady. hold stay to we going are is up think will constraints. business fairly yes, think, while budget I

I mean, at in Our But anything I level picking going have this, in are get backlog. order but the going says of And see am the glad I good as always And to pretty backlog good I company, have think that’s, we are long uncertainty pretty governmental your we don’t in and the key. into change some lower something out of throughout still a level. budgets going And And intake particular or a is it’s rough new fairly a that to up. good is have and pretty yet this, just customers’ I course, some helps that we – governmentals is worse. ordering, spots that had steady when are. there’s orders for manufacturing move and a coming shape

always no am I that that concerned, I the am reason concerned. that am not corner I So have untoward working I around But there’s anything aware some to believe problem of.

the quarter? expenses And you much did how see Okay. in severance

have the such we you have books and while that majority our actually and so programs don’t the severance costs. we that. on been some share had work temporary and of people, I mean, permanent mean, layoffs, because furloughs They’re I layoffs minimal still it’s Fairly and

We of layoffs, said, not first employees. a mean, had but tenured the lot levels I I it’s few a have are been like more

in been Yes. the So our dollars have results. fairly negligible

not issue. far, a been So particular severance expense has

And have point guess, mean, from I pretty strong at things, I to July. rebounded April what Okay.

if you at? they volumes prolonged, start things where looking maybe do sort maybe So just that are furloughs more structural how you come of the look option guess off also slow changes. more a start to take Is I rising. like little much are then there’s and your as maybe an

want mean how see that’s on we people have we think point, the some mean, actually half furlough I right. ago. to I X I at had Yes, we months

done So converted where few the it’s a into of being a down. I permanent see mean And that for a furloughed some think have areas right, few are playoffs, soft has while, going we done have number be we cut we too. been but people you we to

is, of mean, will a in in probably I few think next least it’s that, off, are see do next a kind it’s if under the to get to of levels up But things are yes, more go press that, furlough, changes mean, people we but that, cool So waiting into how the And allow about got control the year. the going second we going key we to solution I going the is way next situation the think of outlined still business to permanent shaping just to I of like we sort few sort couple some all, this we getting the release. to that’s, think sort start business. we more to months, not think few that worried some – COVID have to will And business we we maybe of for of I end at wave, to our on of first be that’s not and to where year, a years. layoffs. to view of permanent this settle to mean, look, the but just we where in

I COVID already And and goals layoffs of And consolidations. we bigger continuing initiatives that. do But fewer, mean already. are a I to we we not why being that, there’s plant steps worried, there’s of One have we’re those thing we’re And over in our said, bit like consolidations little road. is said, coming it’s usually, some we’re in think we’ve I like but time as concerned. is So I have this last we’ve year that’s the long that’s done necessary, taking term, plants. something we one we’re down major like, being mean, we do few we done each the last cautious think with each a we’re I and and

doing another, last did year. we’ll do mean, next we another we’ll couple a probably So one year year, a couple I and do this we’re

So I mean that kind of ties into well. that as

And big doing to the are that that. consolidation? And all end Or And pretty or. was Where what stone? it I by Is done pretty the set Milwaukee material? year, think wasn’t guess is the up consolidation this these to quarter. that we in be you’re I first going follow of supposed the some with I you doing? much on to are exactly utilizations be that you are

have that really all, on a first I half we was into cutback mean I will some have, the account into up the turned of instead running. and looks finished the we the of cost notice, the One Milwaukee alright, of the you in Well, it One CapEx but and is a from in like we one and was indicated, on of CapEx, capital have thing little of said account. than sort sort capital of some of to working put was the because Milwaukee higher first

holdover that but so spent And really it year. was actually looks a from all like last we more,

timing So sort delay of a last I mean, from the in like year.

is have owned consolidated closed, them. is are we’ve we We and really and one money. But that. been we sold That back. So operating. plus, been that up not cut It the of only it’s one’s done. collected We into

So that a we It’s good this all of glad well. it I’m one hit. done went plant, before and got

it Just makes much it easier.

that closed we into two. into is was this sold money. two the our that one Ohio. the our up and Tenco into and we were year locations. also in under should So last their it which plant the but in in that, two one locations, be in RPM last we in the and another bought also them And the in of one small three U.S. When we they sold, smallest did move but one and a Quebec complete Canada announced Canada, one XX got closed one away one that the RPM had of Morbark, We quarter, was Canada. combined is took their from that’s plans those way plant, In fairly from three and ones had the to plant, Morbark we year our close had announced we one and plants, moved take minutes of have move that to it sort the move that’s to we that Tenco now

way. these on on to are like we a said, So we that, continuing said, plan And I I of that we basis. under always the footprint. others lessen next our And is those opportunities few that got couple on yes, looking years a like regular in at

overall planned that you how doing. lot integration on the to Okay. a And there just us probably a too regarding sort and where sounds much back last and didn’t Could integration Morbark. is It you on just still update the you downturn things Morbark doing? have set and ended you of planning the like question COVID follow-on on synergies with are of with

Yes.

sales, we in The kind wanted on the general, think of less. I think procurement traveling, achieved going has opportunities. just well. I put said, we purchasing cross-selling buying do been lot a of internationally. I synergies, with some international because it’s Like have identified to of of we feel especially With that hold and problems good we’re obviously, lower logistical

technology not will levels, in started to technology up, in I that we this. technological believe made we lower installed much. of mean, the pleased And in in which pick sales I there, we the very is we’ve robots it’s actually quite health fact related also labor Morbark like those so we’re up achieved plant. are come developments believe we’ve good up in funded that as those operate, paybacks. the putting at total say, day the so as to And capital we’ve the the mean, more business we early year, the pace staffing as But in and the and literally, savings of knew, we is, on pick plan the very now in well. have that October are like savings what to some we and that there, same last short-term dollars which I to we but and haven’t some coming We at had starting related making with some in COVID, cutbacks too, some that from bought we somewhat investments

year ahead have little so ahead. we I proceeded of have ones mean, proceeded in that had a we’ve beginning, plan as operationally, when but I IT that so complete we still on mean IT, there the those being and Procurement this furloughed, IT well. so very integration, we because bit a delay to Yes. hands And people have was and didn’t all restarted deck,

I said, by ahead moving actually integration ahead. is it’s moving the and sales. So one of like large, And plant the

able ahead, all than we else better given operational lack that with. thought would So the to of we to, able be we and have been challenges being actually travel everything are moving I faced of

Okay. luck Well, of the lot. rest thanks with Good a the year.

Thank you, Joe.

[Operator Instructions] Singular comes question Research. Sakai, from The next Chris

everyone. Hi,

clarity, question to add Just Europe, the Europe operations. a on

light shed there, North facing demand why some was could and more If than America? you issues Europe operational

the think most wanted travel. came of mean, harder was I France, in were you justify. were like much they it restrictions like deemed They government to Europe, down all In businesses to more on really our essential. like put all, justify of I First harder. They here.

our I on, early like the So it little I in more, a to harder, like function. was said, whole I when harder. was plants country I say, was all bit harder we mean, closed we and was just think down transportation moving France around, were everything

starting to slower England, and incidences I a think the mean, England seem to have more had I respect more Some in was situation. really little COVID of

especially they April, we were plants of England again, think interesting. for in almost, France, go here, most our they down closed responded. our while. a It’s like the say, were during U.S. and hit I plants, for hard And pretty

in more of road, weeks you almost a say out and before throughout almost be We lot closed. Netherlands France I were there. have it’s And they a down you why road. plants the really shut Though some seem you governments functional limit operational They to our plant really closed our It really out interesting, to three plant couple and the on travel. have or in I three keep on of like think you and and would never this. a to have had to kind the for if letter things were England directives days then two reopened reopen. the was But said,

and lot low created that and think everything, I bit as in while but sort intake And now gap shutdown more those challenging. backlog more more challenges a So has they’re was a operationally was back the that were operational very little of didn’t there. functioning but just function which so much. improved, Order during people they a it months, so

harder. down And so Europe like said, just I came

can areas of And within did had New operational U.S. other down the we hit parts New York, You We than got write back like harder. issues New in kind of the in you And harder. can New more if came or go even forth. country. England you England York, they and

England have of but parts I other be country, guessing, be they operational they doing should the done but and second all more issue. or we’ll should we’re saying, The more now, just am much it’s France, more

Right.

Okay.

Just quarter, looking M&A does by this you Say, another future seem added cash are good. past for next the I quarter. is mean I like what’s plan this you debt million are reduced the you just it guys $XX going or again debt on, opportunity? I as question in flow guess, mean, on to in reducing

did and year carry. and year biggest into going we had we three this hit, even before down ever integrating typically mean, did into on COVID focused acquisitions were paying slow down and last this we debt. since last said debt M&A from on already activity year, had to going we more going year, I are Well, more we acquisitions than our and

one. So to that the decided industry M&A of the an fact suited, were fine taken whole sort COVID already take that’s just because for we holiday

and from are valuations other doing use is everybody to to not absolutely challenging But or like probably manufacturing. industrial, be there those be a think on, looking bit think and a delayed are there I mean because manufacturing, think it’s sale kind challenging. start the only can’t pharmaceuticals tech, I And or already you were would sell. I are people harder that lot I up especially again. but still processes travel. maybe EBITDA people I little to of assets of high still property sale companies, some Travel And So they And you some of think right. medical companies, think maybe these I industrial I industrial necessary says, at now, going bit is trying to right thing And are out processes things today. mean, sort went a in are going of industrial

before COVID, look sorted going slower mean, like out to to getting get if pre to at could but even think could oh, I got we getting things think be things I say, how COVID. be You I back and I it it’s pre start better, little long recovery. got start this be, a

do we conservative strategy, are I pursue we say, a looking M&A, and fairly And the of still and we short we want we but structure, to our sure remain before our internal. we do are bigger. And But much say, them. looking. of term, we financial look. is limits I more part something are pursuing to have we within the like smaller believe So we want But think We I still it. probably we comfort think would would focus wherewithal our in on make would acquisitions our I like yes,

have Okay, is see would guess as again? good great. Last, as I I into mean, of I you do down shut just your guys, as like any insights being factories your that. mine. yes, particular to a don’t know, guys what I Well, chance mean,

stay the we ability are have have past a well I and given support in that of plants open. our lot think functions, governmental a essential of pretty to lot our deemed gotten plants and agricultural been most have

long I if they one like go that are of fairly any period are our down for of by a mean the France, increase either not big it’s said shut area. issues they in this a low or I So we within mean and I us that COVID. very in there’s France probably health to or they recently, probability think we of of plants had I know within an get part time.

making we results they reopen. could have day next in the unfortunately, then in I a everybody mean number test in day could one were get everybody. literally our everybody test So one, to And and plants. down one everybody of for we day. and they shut test the But

essential. bad So key, have we I most, better Is wave? drug first? than can mean as to it because going what’s than this Are do to that? what solve where our kind with too, need just going the we’ll pretty I But Or lot that there there’s of think deemed some are COVID to going well second think and Is those problem? mean, of if this just that’s go is be a I plants another be situation. a scenarios. we a I

I think little I our are only smaller basically bit either. more but rural mean in not don’t community of to in plants the we smaller easier it that we plants are have control. be helps in towns. big cities, which not a U.S. seemed in to in areas, mean most Europe I the

plants, in in even that. plants I have lines plants, people don’t we we groups operate within are running are our mean it’s shoulder to able have so they we within because to cells big assembly we think with distance where I people accumulate and not shoulder. social problems self like our our and in don’t to tend

hand, But going the on other these problems. see pretty I So like ball am is cloudy develop my I I major to actually, we’ll think I continue of don’t how say to is crystal cohort days. function.

that. Okay. Well, for thanks thanks,

Thank you.

over There time. to would remarks. to back now like are no further questions the management for turn closing I call at this

about of us currently. feel ability thank situation, Well, I all for We think as company where we issues I the your the our it’s a said, we today. and good see joining with is Okay. them the and least you challenging deal appreciate again, we And to company. the but interest at support like

of forward you you, So quarter the a third with anyway, look on we thank Have good and end to our in speaking conference October. call day.

ladies today’s gentlemen. This teleconference. you, concludes and Thank

disconnect. You now may