Alamo (ALG) 1 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the Alamo Group Inc.

Third Quarter 2024 Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, Chief Legal Officer and Secretary. ahead. go Please

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

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

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

and Agnes Executive Chief line will some Officer. line and with make Kamps, Management today Financial questions. your the the remarks, open Leonard, up me we'll Officer; and President for then opening Jeff President On Executive are and Chief

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

to the like Jeff, call to few statements. a I over about would turning comments Before forward-looking make

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

known Forward-looking in the company's future uncertainties, unknown actual and statements results. which involve results from materially periods and risks may forecasted cause to differ

actual SEC reports. this only differ undertake labor lead are herein, does listed date. from seasonality, materially disruptions, the cause which to of issues, weather, time speaks geopolitical time any the information conditions, results events supply could in the reduction update a not to to currency-related factors which overall company and which competition, company's adverse contained factors in can The as those obligation to other market Among trains, chain following: demand,

to like Jeff, please now Leonard. introduce ahead. Jeff would go I

us interest the our Thank Ed. Group. We your in appreciation today continued for joined conference to who express everyone call Alamo want on you, thank and

will our comments expectations results the management the our over a the turn from then as the of division and will with review now as in to for early would line to Industrial few fourth Equipment XXXX. I in and through largely take is continued who vegetation few the performance division. financial the call Agnes prevailed quarter I outlook third quarter. additional on words third The quarter the like strong headwinds say provide the us thoughts for and a a on about results market

Following go to look Agnes, remarks, our questions. your forward answering we formal please ahead.

Thank you, Jeff. morning, everyone. Good

largely difficult forestry were to our and cultural impacting governmental, showed struggle The sectors industrial management our division. continued in with Third line expectations. the Industrial The quarter Equipment contractor division. within markets with results market growth conditions vegetation

for last vegetation decline profit the sales, basis down compared the of million quarter was was Gross the margin quarter primarily a $XXX.X with was third reflecting lower X.X% management quarter Total year. to same XXX a points decline XXXX. $XXX.X revenue period due of division. to million, This margin volume for in XX.X% of from

the third sustaining third net the from of of Truck built quarter $XX.X are These Operating margin is quarter acquisition. sales. management was $X.XX -- vegetation initiatives reductions a $XX income of were double-digit XX% saving reduction excluding expenses SG&A XXXX, XXXX which in in of of operating million division. million, Royal up a

it's in points in a income operating note to compared our separation in third While same to this include approximately represents basis important XXXX, the that decline expenses. period $X.X of XXX XXXX million quarter

in last $XX.X $X.XX of XXXX quarter or third year. period the per per $X.XX from the million diluted was for income million of income share share net Net or $XX.X diluted same

to income $X.X quarter in debt XXXX the lower The period due in to provision same third Interest of for compared period in XXXX levels. in reduced was same the million was expense the XXXX. slightly tax

segments representing and to With from million, occurred show Vegetation $XXX.X this largest The division compared agricultural divisions. continued sales sales income XX% while offset in management a net overview, reported to of governmental reduction division take in at that the net our The of look Operating the of was $XX.X year. X.X% a declines XXXX. of closer growth. earlier actions for net performance the the reduction segment let's forestry third quarter reduction cost sales. savings million, this

-- approximately we $X.X included Additionally, in this expenses. million separation quarter

of Operating million, quarter. division during XX% of growth net third quarter compared Equipment growth was to the the the increased compared Equipment Each from revenue division of $XX.X implemented initiatives an other On net XX.X% sales million efficiency XXXX. group $XXX.X marking improvement the last third same achieved to year. period division representing benefited XXXX. hand, and income this points Industrial sales, were or Industrial in within XXX basis The

] [ employee first division ] of Management it Through XX year-over-year. The X $XX.X of net points and The sales, A first results. settlement Vegetation grew XXXX. compared months XXXX basis million million division operating year-to-date was sales, of expenses. Management reflecting approximately income million Industrial and few the net or of summarize words billion, Vegetation million to XXXX, was of Operating while in declined the $XX.X results or includes Equipment [ September division $X.X XX.X% $XXX.X months of X.X% decrease X -- year-end XX.X%. net for the for decrease $X.X to XX.X%, representing income X% a sales

months Interest $XX.X million for first improvement represent $XXX.X for tax year sales income point benefiting year, of provision versus X is lower approximately Net levels. improved operating for XXX debt to $X.X on Industrial million of and we XXXX. rate. was year a effective The versus Equipment compared or higher division the basis XX% by the prior efficiencies. from expense prior taxes net year revenue improved $XX.X XX.X% months of $X.X income versus is first prior million and the million million X of income lower

vegetation that continue we a now discuss We'll to on later actions initiatives. are conditions challenging reduction in cost management progress. in division, the the execute cost address to reduction number the speak me details call. To Let our the of macroeconomic

is million The these We between further over million expenses. some $XX already annualized on to from initiatives Our same costs mainly to these savings the began with next XX see quarter with associated $XX months. expected to separation third employee of an actions accelerate basis. in savings target these are

third quarter, in million. total $X the the million, be and For the million expect months, million, for $X.X to is we approximately $X.X total approximately severance this final between XXXX. be we incurred expense time, $X.X incurred and the At will which X

sheet. balance the to on Moving

support the current environment the and position, navigate a We ongoing initiatives continue financial us strong to to maintain with effectively. which provides flexibility

outstanding $X.XXX at the assets million cash to the driven reduction sales and We of $XX.X accounts were is cash compared total of same in This higher representing X increase equivalents. to compared reduced end $XXX.X X.X% Our days last also year by increase a third small end XXXX. billion the $XX to time. in the a days quarter or at by our million of of receivables quarter, representing third million

first $XX.X or vegetation division $XXX.X XXXX. flow offset Higher in in Inventory XX% to of we first million XX%, of compared first months the achieved the million XX% XXXX. X Free inventory the the $XXX first compared in X months flow cash to months months increase end Equipment of compared X supports at to of increasing million for division quarter XXXX XXXX year. division. that million in Industrial third cash was division. the an last Equipment of $XX the the million Operating by flat X growth was for Reductions management $XXX.X revenue of Industrial of end were of

third the quarter we third $XX.X compared In by down quarter paid XXXX, net $XX.X total million improved or $XXX debt cash of of XXXX. to million. debt by of another Total X% of million

our $X.XX To delivering our conclude, emphasize value the shareholders. Board XXXX, regular We share underscoring per confidence third dividend the quarter long-term approved in commitment our business. I'd for to like our of strength and to in has a stability this had to

and focused we As operations. will of remain our on more, driving growth optimization move we

it you. back Thank to I'll turn Jeff. over

everyone our conditions joined our would my on third results given Thank you, call line mix add welcome expectations company's morning. us the in this to quarter who markets. in were to I with The the Agnes. personal like

in the a very vegetation We governmental activity the continue customers continued divergent levels current invest display their that and during and industrial, to contractor to the quarter. experienced modernizing markets in quarter, we As upgrading capital, our fleets. were second very pleased maintenance

remained across In governmental all North strong of lines. America, product demand major our

approach tapering some federal offering shape have in national elections, [ States We been finances aid. result minimal. eventual has reduction stable actual sales revenue. growth in flow strength good and that League we receipts Municipal a as property of National the revenue A been economic [ but are solid recent for sustained of Municipal report despite as Cities impact high anticipating in federal from the a generally on cities remain prepared an United modest indicates of ] model a also ] remained aid. the of tax tax the of

for Similarly, most Industrial consecutive removal and states to reported than results immediately vacuum year although the company's above year the to and quarter. snow same in debris forecast. report, fiscal third revised XXXX of of during revenues states preceding continue equipment a elevated update, majority fourth the National trucks, reported State division closed historically sweepers, with in attenuators of rainy quarter. above strengthen. well funds forecast These remained the and a Officers cases, Association reported original that day upwardly According collectors, Demand in the recent smaller also years align in the Budget our reports the a surpluses, street in the in some the Equipment craft

nearly X% quarter corresponding to division net remained Sales $XXX This reported third XXXX. XXXX, of than the of third quarter $XX.X up same this backlog historical higher of the with strong the increased with to the compared levels profitability XXXX. at ended of XX% excess division period than and the up to nearly 'XX. division more modestly in XX% Equipment but Order a income compared of period million, of compared in bookings million, quarter in were Industrial the in

at prior of served management of also third markets year to by several by Unfortunately, the quarter. order conditions increased XXXX. remained an vegetation to improvement third quarter the the XX.X%, bookings was steady at EBITDA level division rates XXX points and X% Industrial basis onset wood in division a quarter. very the the Equipment strong has and third soft. the with of our level construction elevated for lumber continued products sidelines. residential mortgage the commercial the during low starts on U.S. derived pandemic housing markets are as since remain Demand relative lowest

the offset quarter, sharply sales in improved with of in the division's sales by Europe. North forestry care year partially and compared prior America to result, tree a the products As third declined decline

to of Agriculture agricultural be softer the that farm XXXX during expected inflation-adjusted remained products recorded third relative basis. mowers, X% The peak the in but income XX% for adjusted Department 'XX, also projects would nearly related decline farm Markets division's tillage average, U.S. inflation. again, XX% will the on quarter. income above from in an for XXXX, XX-year the Despite decline, forecast off its and

below somewhat that well the costs lowest the dealer The input recorded drove lower half Commodity farmer new remained third the since level has and purchases of of prices the but during XXXX. delay to peak equipment combination prices Farmers to rising levels XXXX. improved and quarter elevated. of in inventories crop kept continue first sentiment

spot governmental vegetation of division's our have second vehicles to America rights prime period fleets. generation state during to the to in this quarter agricultural nicely equipment and third relative what way municipal and XXXX elevated. management Mantis in continue management products in mover Europe. and earlier of invest division vegetation the South to product specialty new The maintenance of and of Sales since the steadily increased agencies maintenance the other third declined -- steadily governments a remained this these were a bright quarter. specialty roadway of year. was Sales quarter upgrade during otherwise aprons North corresponding mowers roadway officially of challenging of of both for was introduced the Sales increased Sales for

declined a XXXX. sales declined division with for of $XXX XXXX, Order of quarter XX% the third and division headwinds, the same period third of bookings quarter quarter from these face million. the the market management versus of backlog In XX% ended the vegetation the

its conditions management, the to during address the streamline To continued the difficult in quarter. vegetation company operations

Wind, the the quarter, initiated products tree Michigan. and quarter company's largest transfer manufacturing in and manufacturing be this Rhino year. Care Tree second consolidation care the will the the forestry during completed to of facility fourth of During The company

transfer developing on our in divestiture manufacturing to announced mowers will we we allow or August, Alabama major [ to golf consolidation vegetation During our its Selma, a August, facility we focus transaction ] that push This where facility the produce small NOG the announced areas. tillage in and equipment. of a larger currently branded parts Also in to FP team product of management market related tools. involving second was core

We expenses associated these expect in to book with quarter. fourth additional actions the

consolidation of reduce by equipment consolidations the the this the Gibson falling facility XXXX, will closed. capacity rollable division. approximately completion The the X%, in continuing the equipment. anticipated particularly will snow quarter global manufacturing for trucks and Following within is to company City, first be progress expand currently in The company's vacuum facility vegetation management Illinois capacity, industrial manufacturing of

to approximately XXXX. the the population to Associated with December of XX% employee consolidations, these decline significant company's XXXX facility by compared end

conditions. management and market restore actions are were these profitability regrettable, current declining necessary vegetation While to in given to acceptable address demand they

corporate performance. to Turning

strength were operating to despite serving improved lower management, We headwinds again, net operating result restructuring third management partly in Equipment. of quarter pleased and vegetation margin demonstrating vegetation markets. third costs, Third diverse in income compared -- in and the operating of XXXX the that as the offset by the achieved XX% X% operating sales a quarter consolidated of Industrial margin quarter margin for declined of an sales company

more declined great a quarter the the did total by debt declined net sheet to the compared cash XXXX. the teams third than $XXX Our as quarter job third by of balance managing has of and during million million $XX during quarter

quarter last end to XX% more was Long-term of year. than compared time debt at same third the the the down

was million EBITDA $XXX of or XX.X% sales. quarter Third

We are, to improved is M&A position environment an what in expected in excellent from therefore, XXXX. benefit

remainder is for outlook XXXX of Our somewhat cautious.

do we year, market elections a of anticipate dynamics final the impact the of uncertainty. not the near-term While in swing in national the United potential in weeks States

to incur is to related employee in expect the additional now fourth costs plant underway. reduction consolidation quarter also We the

improved overwhelming South impacted and The horrific chippers for filters and of clear hurricane we equipment other debris, short-term the would devastation States mounds and specialized and require to movement Eastern the demand great -- the of X a major United deal is a anticipate of in impact will our have XXXX remain by another dynamics expected -- position to year is earnings product in the governmental be were modestly positively. next management agricultural market to mixed, challenging to agencies year expected what Market expected for that sector. pinning despite

model structure earnings develop. and will to how to we adapt the Given matter the mixed our continue outlook, may operating defend cost no markets

Given repurchase positive year also outlook, the and the Industrial authorized its up a affirms business, confidence to just pleased XXXX to will backlog under another flow. The is believe and based the the Equipment of in outstanding common of strong future be our is balance future strength on repurchase we division share of million which the for positive the program company of announced were company. We stock. to our $XX our repurchase expectations in plan sheet our its and cash announce

customers, continued our sincere company. opportunity the and to for stakeholders appreciation dedicated their financial supplier Before support this ending, express of to take would dealers, our like employees I to partners,

This remarks. our concludes prepared

to ready take go ahead. Operator, now your are please We questions.

[Operator Instructions].

from Our first with Mike D.A. Davidson. question comes Shlisky

about So I I I make wanted guess understand guess how sure cost I ask permanent these want to I the are. first reductions. to

need result did out capacity reduction take anticipate forward, at within couple to of little bit a that be just some that likely capacity, You see is the take next do of the to you the place? -- going the Or you thanks years, a back? to not of as the less kind

Yes.

difficult of have X our regarding than over has you're square Mike, the Michigan future you in the more capacity well X know, we feet to million as facility meet ample consolidation, aware So certainly, at been long forestry so and was years of X.X or anticipated while or And the needs. consolidation has that last to X entered sector. booming for we execute X ago since this years

one we we'll soft ag the but stay Ag of Rhino adequate that for side Being next to another Hog, to may existing ag looks in The our future we'll years. most couple business the have be reassess consolidation our going in certainly, that, be like have locations and of what with or at the least. and in seen. of XXXX capacity of in either one. the is to do It Bush remains

time some have to we So reassess.

But around we're facilities, to things Mike, manufacturing of our you lots and able as know, network. relatively within have move we easily

overly that. really not about concerned I'm So

I savings and machinery Hog done as think are need regarding while here and I inventory we the generate into today, to can you the those cost the so sit savings need we that underway, is majority programs what on. take of to of say we move Rhino to Bush some some the remains, to physical consolidation essentially actions

actions people make Hog to need in already are the the of capital All we investments facility the and Bush underway.

also touch the a reductions or XXXX. year. bar Got to cost X X higher margin it. wanted outlook for on made the I next you Obviously, for

As far you of like operating feel as what's got to you've get on the the in line? margin into next both opportunities the year more backlog up in segments, do

That's we're have team told margins to. Yes. going the Agnes and do going that's have to Mike. actually we're The otherwise very would higher, actions the the deeper we're we're decline. event, continue is some market event to expecting, I drive what what to in to further we markets committed than should invention And so management this contingencies and that. and taking management planned some in actions, we we

noted stabilized my bookings the fairly our Although to bottom. backlog have is now. so well that and view and close It's personal we're been on fairly

just out for to to it where is So we're XXXX. ride going have most of

about. I'm more But forestry, optimistic

seen and interest more we've they're rates down the in not to little shows because a XXXX of with major will number of the speaking, activity little a uptick a customers come bit optimal expectation that but a talked been the feeling generally bit luck, We've that little a bit. there's think of that I hurricanes, forestry in just modest sector.

next yes, we're We consolidations, very that. the execute well. believe I'm We So to I what a expand couple we But by need margins achieve Mike, stand do execute with points doing. we'll to today room of to it got confident we've given year. where need

between focus and ag larger correct? to And forestry, that right is want confirm is the of sales, I forestry now,

dollars larger division. was the It in in it and decline is, also that

question CJS Chris next Securities. with is The from Moore

was with go X.X% but can discussion, QX. margin in maybe just segment, X.X% -- margin vegetation start keep just we deeper on versus Maybe operating a little the by

If you quarter. X.X% X.X%, this it adjust was out that

terms is QX the on looking or bottom that? uncertainty in that, QX still of bottom So some likely the at versus

we're to prior think the I to bottom close costs. restructuring

You said costs further Chris, coming management actions vegetation management. in all were keep in on restructuring the call, restructuring we of have mind, these vegetation QX. taking our in And

And several say so about a least. is if you vegetation of taking as the organization out heavy, very think employment people management of our to and hundred percentage

So adapt we've there to got to kind situation new a in vegetation operating management. of

is to And less or to where the OEMs that's said we if same it's trying go know here. it's So going be bit I'm And the the distractions bit next of clear. a contingency like absolute even think Agnes the say but what I very or I in frank, flattening, it's the sure as not bottom and going very we've is go pocket more stabilizing, always a but in we have -- I that's The what terms do forestry don't very looks we I stabilized, at ag to QX not, picture we're thing. market to you. taken to plan is are we're margin, the certainly to saying of moment make year. announcing improvement execute from I what has in to still the believe XXXX. uncertain year, do our But big where and in in see some

that Barry. our pre-pandemic was sharply XXXX our emphasize with network share you plan very and that is where I'll down inventory can I out XXXX, to compared dealer on floor what's in our it in and

inventory in OEMs, tractor OEMs The is dealer we network. So from the of into in the ag large out to we're much that that better a a still point of view, have face lot push position. difficulty

our short together, that the the likely So that what market of has if it you market we're should those is means recovers, very of point But from view very in we put low the see potentially inventory right benefit as uptick means fast elasticity X the statements that field now. run. declined, a is because our see not to which in

you little a So I bit. hope it helps

does, very industry over vegetation. helpful. back I go Switch before to That to

modeling of margin, So for the approach Industrial operating to the I below We're in being just the year. quarter. XX% able maybe XX% again guess 'XX? takes XX.X% for and put

I is think the in the industrial backlog I we're And level where going Chris, given products in demand the high there think a soft soft nice a we our the at stabilize it at although is. quarter, for to looked little bookings will. all. not

ahead large us mostly level We high. a is it's our So have timing opportunities issue. confidence still very of that

I some are So we've nice have that recent the inside of measures next industrial and year, is going of a acquisitions improvement division, on made. efficiency very the the have to Industrial we backs think out year still carrying that we're some

facility consolidations, to sort some margin small in industrial expand more. that So scale do operating hopefully ensure a and of bit little to in we've got although

Got it. helpful. Very

'XX. vegetation 'XX? Still improvement What overall. levels So a late the talked ag hopefully about about Rates a until improve What on you continue not grow take little to rate would side. in the bit bit, little just expecting down more. coming to inventory it

it's take Well, I going think is some rate help. what interest to

we bit rate I year. little help interest the think a of that got in earlier

And showing it's said, as I of be will life. up. to back tick first signs the some Forestry already

have. in good in Our is facility, And structure facility larger to is course, it's that. we've essentially XXX,XXX one. cost The much lower of having to now exited big of a is a forestry for foot closed see square plants off fourth forestry X the we that encouraged start quarter very a X so our forestry,

coming we out should savings nice of that. So see

that. progress, the overnight I forestry will and think in about I better event. much be year an optimistic But So half. going It's next the to see be I'm back certainly, not

pressure the just means is the we on are inside a is to out which They situation the still now because the into push shelf to inventory. us all our it call short liner have a going lot the what And dealership. makes under don't OEMs. in year. that big that a field, tractor hold remain hard know our expect dealer tough of for They balance sheets like Ag to actual right

So that's cautious more why I'm that. about

The Mig with next question is from Dobre Baird.

Back to vegetation was there, your Throughout year, management, around have incoming So you've $XXX $XXX to million. revenue orders bringing production, orders the was QX million, stabilized down million. been right? the down QX $XXX $XXX million.

that guess be imagine I sounds management recovery would So it's at way it quarter management the Is this, the are you that fair given and per might framed converge half of this, million we're in towards going production, of to vegetation half? XXXX, see going least think to to call that in orders. continue your in I my if sales it's fourth going back the probably question orders, and more that worth be is way assume to the kind loaded. to into vegetation about -- pretty orders, right sales to your muted to quarter like $XXX front a it, right towards about right, think

of the for which side it's yet, and get It's key orders least because hand not more the will in particularly now. bill thing, the It but being that be management half first of all-time close, at getting next education an low year quite we low to them is living in ag. mouth with ship backlog, the ag right is booking means near

bit little Forestry is different a case.

forestry, see. but about said, encouraged in with a don't start I I can't and off to we've in obviously gotten -- that As yet. good I orders I'm too QX want I much what with to say

the there's also but Some underlying demand some to of that back. was hurricanes, coming related

Mig, out a They're or Raven rates few about go on and the X and future. between elections met many I a go, concerned back understand obviously went is And where X the did, number and what's customers to had link they interest you call, national X When said in large we period, starts long encouraging or initially and creating we a pretty weeks as with stronger uncertainty. and actually how the that's Rick a our which see report got back than housing of the X that. thought. the

fall pick rates That and should up. housing. demand there interest the the business. starts side housing will certainly The as of for So eventually forestry help is

recovery is is, next in year it the be my in of view my and if, late, an will year, So really that's ag, if a late there from point view.

forestry could midyear. I the second. get the we maybe think early rate quarter the around at I'm looking interest how If another or That's first it. recovery in X in cut and start

of Well, in the trying erosion XXXX. question. where converge at see. If see million to to million we're sometime $XX you I kind level call were call really $XXX revenues in was where I to QX. get front with half this, going my towards still, it, relative of a That's it,

margins have cost struggle relative that of be decremental see how I loss? would revenue normal because that through to outlined flow are from QX. sequentially imagine further still through. going do have flat would what that coming like margins simply to you the had up you savings erosion in to margin should You I or you

think, QX. I about the that's I And why earlier Mig, on question Yes. was

right. You're

on exactly less That's Because worry long close. for books year. You're our it it's right. worried inventory lowest QX. we the and field the next the of amount said, even a QX in been by I'm not as QX years is way, I But about the head in as into

and in where 'XX. compared XX% XXXX down it we're was So to

out lot buffer not sitting anymore. a So there's of there

The So chunk cost huge have to taken revenue going run you're we of out a but is of remain right. rate this low for while, a business.

management. And reductions we're these employee these we said the XX% are vegetation in reductions that said, at cost I that As inside all you XX%. is corporation when of about look

said, and planning huge that contingencies need I taken out chunks to and we're Agnes I we've cost as there. So actions have already planned, additional we some we've And take. of further of some if

around it. playing the quarter least You're next I your going for year, -- getting agree to of defense in comment. We're that at with make first no right. business be there's

I to I is what of we think in just sure able do. get it's place sort the business here make expectations that to the want because set maybe relative to easy estimates level to wrong

just how decremental my call finish you've the to thoughts outlined to we're kind the keep into you maybe So mind savings again, modeling when Is they're cost it to margins that of is that contraction Is excluding Is investors would talked the of it care it of in need normal volume that leaning here, today, if kind cost about. on this you XX%? kind XX%? savings XX%? any So XXXX? out

Mig. Difficult Okay. question,

think you it the look of X there short to to to something downside margin anything add could where the your if I sort in view? the are Agnes, that That's X of management, from point vegetation at decremental that. agonists is you And risk. want like points, be term, modeling

revenue do consider consider you margins the But going implemented in is savings that for example, doing still to forward. the described be consolidations improvement fact describe that cost the So we're you've the the lower. that are plants, We Jeff seasonality, to might as to QX. the exactly now, as what And those an permanent have you we need costs. heard in in design

later put out let's improvement yet, it not And and So an model the of way. we're we're when you XXXX is what expecting that margins, woods in beyond.

the of here. we've consolidated Hog and the on brands, the functions And engineering the thing We've you consolidation When I call. SG&A team. specifically sales and it mention look Bush last consolidated teams as Rhino at maybe well. the one didn't

large cost down out has very overall we've So taken of come significantly well. the that structure as chunks and

structural about change So business. it's not and capacity absorption. We've a just made that in

one another business. have thing, add me let more maybe. We do And --

business equipment division our So quite in is like still well. investor do diversity and doing we

is permanently, industry we're an well. to opportunity adjust So this is taking costs doing while undergoing change very structural vegetation and equipment still

So need that. we remember to

brought sort Since you up -- here. things about as And core had SG&A, this question the X% significant. pretty decline of in X I wondering well. a I'm

plans well? you the bonus might it The will SG&A in sort and year-over-year compensation, is think is whatever How a QX us fair about have, a accrual of we on helped one should reversal, the first And basis? as XXXX there additional SG&A in is, QX. variable that decline of given expect restructuring to here sort something

Okay.

So Mig, of accruals myself to this in compensation be. and else of first everybody elimination question, part company for it the Yes,, obviously as there's an for your should

of or think my don't of amount on us, That event. it's QX But SG&A consolidation forward, this it appear. but of going about ag can didn't QX secondly, get So behind the you savings head, top true. cost sure it in for our event. I give you but the as after in you call. this side yes, that's business I'm It's to the know can that a we the

our savings further This of business permanent So you'll structure SG&A is this in the going see going is the not that ag unravel. to forever. be because will consolidation forward

So those offset. X things will largely

next do question, this think management table of second to until you not is at part the business a Now making year? what more about your obviously, money. starts SG&A Well, the profit

on to We're you earn we is hope as with got So Board basis management even At next it's of it's certainly haven't don't for doing discussed our of not yet. a still point, Directors this be but to year. improved year going card. I speak. bit I our bonuses that next of the to profitability. we want budget do, we tell wild a

No, if part understood. is SG&A call like a to item that But understood. out. structural in there's you was wanted line wondering component the I just that

have down on final XX%. quarter the at wondering revenues at half as at tick the has when up the the sequentially. Demand equipment. guess was and however, guess your about continued what It the well good. not a bit more, I sequentially in softened is here very I'm I'm first versus question incremental looking industrial to I XX.X%. right, Margin,

you're a to wondering price essence expansion like if being here positive there's or to if the XXXX? that can we the I'm Really, significant is, margin of earlier moderate. seen in the some the mix of XX% underwrite costs of question year, XXXX function of is starting to level that So we've kind in this relative in continue

certainly for moderate tougher because but taken They Yes. There for is bits we've will in than margin you direction. room it as that go. gets expansion more sure industrial,

We under are industrial. in absorption still running some

have We full running out flat for capacity. are facilities that some

deployment are the industrial vacated and We forestry products of backlog plants going removal of us We've we making that taken forward. into have the one to for should others accelerate not. help some which snow there in that the revenue,

through margins orders expand any I are reason and think high I see the very why are continue all to will that now. the industrial quality So modestly shouldn't don't it us XXXX. coming in right for

than said, were in reflected markets As our I stronger quarter the what are bookings. third

made very would I The the on that. a to of say, fully I national call. thing confident only couple references about elections So we're

I really third. and us well year Normally, me a get think and government election usually starts into quarter in start us will followed year through for carries then The enough, an to know tough industrial. you in the second that the is You cautious.

have the flattening will the the And their which matter get which municipalities orders it That's back So the the we do, in to they of what lot. pretty to. no U.S., I good saw the a upgrade of those matters election in I'm and shape money the over, confident what doing made remarks Industrial reflects is some fleets. all spend They that. which segment once I way governmental to goes, states think is about why are

and We've feeling they're and our acting our of customers, all also direction now. right talked about our operators rental the truck to good largest things dealers,

think pretty the is industrial future I So for bright. look

[Operator Instructions]. Burns Company. The is Greg question next from Sidoti with &

the offset any, plans management? implementation if your the adjacent opportunities growth I your remains vegetation maybe I appreciate debt any seeing to categories. what opportunities wondering continue of look now What But leverage pipeline are what of we're decline. the levels looking was some maybe flow to M&A for the in weakness for just into strong. expand You of leverage Cash inorganic like? And you and some to new Are are, buyback.

M&A The in sweet couple much coming big Yes. pretty pipeline our interesting for that are looking of 'XX with is spot. right a opportunities

and that, -- I'm share buyback now. more opportunistic. is cash that's Agnes And about of a bit So holding encouraged I right the are and why

your lot generating we've business, we're spending as continue to the this We to we flow it there, a way I taken out are of in to very of point, cash should much cost to positive habits of back right cash our have cash. And and have lots now, a of Greg, old going forward. mean positive exactly

but progress division. opportunities take moment. so inventory to well. of material a running that top very made our that for with terms in looks internal And couple up aren't chasing of ones growth in But down the nice industrial we're further. are then unfortunately, material the to of have Vegetation we Management We maybe inventory We next the with some at tuck-ins small good year. still had that and eat the big line up pipeline some there's operations to stacking

and that's the balance why we're taught. sure making So nice is sheet

move quickly opportunities opportunity year. come So next got we've right these to when

the I This and to question the concludes answer. management back like over conference remarks. would to for any turn closing

joining you all forward Thank on of fourth for our call to with speaking the again us look call. conference XXXX. today February on you We quarter in

The conference you now for concluded. Thank presentation. attending has

disconnect. now may You