Q2 2020 Earnings Call
The.
Dr Onyx Dot com.
This time, all participants I listen only mode.
After the speaker presentation, there will be a question and answer session. You asked a question. During this session to lead the press star one on the telephone.
He period for any further assistance please press star zero.
I'd now like to turn the conference over to this show Anderson, Chief Financial Officer for Dr., Onyx or something introductory remarks. Please go ahead Jim.
Thank you good morning, everyone. Thank you for participating in our second quarter earnings Conference call I would like to review our disclosures cautioning investors on participants, but in addition to statements of historical facts, we will be discussing forward looking statements, reflecting our expectations and plans about our future.
Orman and future business opportunities all forward looking statements involve risks and uncertainties, which maybe out of our control and may cause actual results to differ materially.
Such risks include changes in economic condition changes on the competitive and market landscape, including impact of global trade discussions and policy management of growth timing and magnitude of future orders and contract fluctuations of margins the introduction of new products and technologies and other important factor.
There's as noted in detailed in our 10-K and 10-Q SEC filings.
With that let me highlight some of the financial results for the second quarter and built and year to date of fiscal 2020, and the related time comparisons to fiscal 2019.
As a reminder, fiscal 2020 of the 53 week year and fiscal 2019 was a 52 week year. The extra week of fiscal 2020 fell within the first quarter, resulting in a six months ended being 27 weeks versus 26 weeks.
Sales orders in all areas of operating expenses were impacted with the into additional week in a six month comparisons.
For the second quarter overall orders remained relatively flat as compared to last year's second quarter orders increased in the international and High School Park and recreation business units and decrease in the transportation commercial Enlight events business units for the year orders are up 8.9% light investment international orders incur.
Chris which report, partly offset by declines and transportation and high School Park and recreation orders commercial orders were flat year over year.
The volatility of orders timing for large projects in global accounts varies according to the needs of our customers and as the primary reason for changes in the quarterly and year to date comparisons.
Each business unit was impacted by the additional weaken the fiscal 2006 month results for comparison orders pace at $12.5 million per week in fiscal 2020 as compared to $12 million. During the same time last year or about a 4.8% increase.
On a year to date basis, some additional highlights in the business units with the largest level of order changes.
In line events orders increased because of being sick of successfully winning several projects in the active college and University market and winning a multimillion dollar project at a professional baseball stadium.
And the international business units.
We market to customers and geographies outside the U.S, and Canada, including areas like transportation and governmental sports and commercial for the first half of the year. We have had continued success in global and regional autochrome advertising customers as they continue to build out their digital networks and have had continued success in projects for more.
And casinos port complexes and transportation stations around the world.
While high School Park and Recreation is down in orders for the years compared to last year's record level. The market remains active and interested in larger video systems and in standard scoring and audio applications.
Sales for the second quarter fiscal 2020 increased 1.3% and were $175 million as compared to $173 million last year net sales increased in live events transportation at international and decrease in the commercial and high School Park and Rep recreation areas.
This change in sales correlates with change and orders already described and the related timing of these orders and backlog into sales.
On a year to date basis sales were up in all business units due to the increased backlog coming into the year along with the order changes already noted.
For comparison to the 20 726 week six month ended sales revenue pace at $13.2 million per week in fiscal 2020 as compared to $12.6 million. During the same time last year or around a 4.6% increase using this comparison.
Gross profit for the quarter as a percentage of net sales was 22.9% as compared to last years, 24.8%. The drop for the quarterly comparison was the result of additional project delivery costs and tariffs as compared to the last year. During the same quarter tariffs were approximately $1.4 million for the quarter.
Yeah.
Gross profit for the year was 24.1% as compared to 24.8% in fiscal 19, the approximate amount of tariff costs for the six months ended were $3 million as compared to <unk> point $3 million last year at the same time.
Our warranty as a percentage of sales decreased to 2.2% as compared to 2.5% for both the quarterly and annual comparisons.
Operating expenses for the second quarter fiscal 2020 or $35.3 million compared to $33.7 million in the second quarter fiscal 2019, or an increase of 4.5% primarily due to our continued strategic initiative and investing in new products and technology and really.
Latest personnel costs, we are evaluating and engaging in our operational improvements to reduce the efforts of delivery, making investments in tools and systems to support and leverage future growth as well.
On a year to date basis operating expenses.
Have increased 7.7, primarily due to the extra week and continued improved investments and development personnel related expenses and increased marketing efforts.
We calculate the provision for income taxes during the interim periods by applying an estimate of the annual effective tax rates to the year to our to our year to date income or loss, excluding unusual and infrequently occurring discreet items for that reporting period, the effective tax rate can fluctuate depending on changes in tax legislation actual geographic mix.
Taxable income and levels of tax credits as compared to actual tax income.
The effective tax rate benefit for the second quarter fiscal 2020 was 63.8% as compared to an effective tax expense of 5.8% a year earlier.
And 14.5% benefit as compared to the minimal tax rate last year on a year to date basis. This difference and effective tax rate was primarily driven by larger estimated tax credits in relation to the estimated pretax book income in each period.
We estimate an effective tax rate benefit of approximately 14.5% for the rest of fiscal 2020.
Our cash and marketable securities position was up $33 million at the end of the quarter, we use $10 million with cash from operations correlating with the increase in inventory to support production a backlog in future quarters and was primarily attributed to the increase in receivables and contract assets for projects in process at the end of October .
We use $9.7 million for investments in capital for new production system capabilities, and information systems infrastructure and $20.6 million and product development, we is $4.5 million for dividends and $1.7 million for stock repurchases. So far during this year.
We expect capital expenditures to be.
$20 million to $25 million for fiscal 2020.
And to be used primarily for new production equipment for new products related reliability lab equipment and manufacturing facility improvements along with investments in our information technology infrastructure and systems.
Our product backlog EPS is that $182 million, which we expect to convert to sales over the coming two to three quarters.
We expect sales for the third quarter of fiscal 2020 to be more than last year's third quarter due to the larger backlog, but of course sales could change pending project bookings and customer schedule changes.
I will now I'll turn it over to Reece Kurtenbach, our chairman President and CEO for a few additional comments that you should look good morning, everyone that should all highlighted we had a strong stored for orders in fiscal 20 growing knows the overall market also grows we continue to invest in development and have more solutions to market more.
Customers than ever before this work coupled with our other investments to increase our capabilities in sales manufacturing and service poise us for long term profitable growth.
As an example, our sales team and service networks reach around the globe and our valuable assets for both our sales partners and customers.
Solutions like our neural pixel pitch displays are being adopted by new and existing customers around the world, especially for these new indoor product lines, we continue to explore and develop new channels to sold through often with integrators that can incorporate our products under locations like corporate offices control centers and retail stores.
Yes.
Our control and content management offerings have also been enhanced improving the way our customers utilize our systems and providing greater use of used to help them in form and entertaining their audiences. This was greater demand for both control system upgrades as well as new system purchases.
To highlight a success in this area. We recently completed an installation in Las Vegas has the Venetian casinos Sportsbook area and look forward to installing other similar installations. We're also focusing on our ability to provide neural pixel pitch technology to public sector, including federal and.
Department of defense applications. These solutions, along with the views and applications of government network operation centers command centers situation rooms conference rooms theaters and offices.
Like many other US companies, we are in the midst of a dynamic and volatile global trade environment.
Today, we are most impacted by the administrations of both China and of United States and the different measures to impose trade barriers between these countries as well as the current run anywhere roederer surrounding these activities.
We continue to monitor and evaluate this situation for multiple perspectives and we will continue to adjust our sourcing and production methodologies to minimize impact to our customers and to tektronix, while providing high quality high value solutions at a competitive price.
However, in our current view, we estimate the tariffs on components could impose more than 10 million in cost for us this year.
We do remain positive regarding the overall outlook of the business and growth for the industry for fiscal 2020 and beyond.
We predict applications of digital solutions will continue to grow and experience in all business units specifically in international with our establishment of localized sales and service channels, our sales focus on increasing market share in our current outlook on known opportunities, we expect growth in sport auto home.
Spectacular and transportation areas outside the U.S and Canada.
Looking into the live events business, we expect some growth over the long term. However, we predict a similar sized businesses previous years, driven by replacement cycles and new product uses.
One caviar does that this business is lumpy, primarily consisting of larger contracts and can be highly competitive creating some variation from year to year.
We expect sustained demand for larger size orders do the adoption of video in sporting applications in the high School Park and recreation market.
And our commercial business unit, we see growth opportunities because of expansion of those solutions of indoor applications.
Continued replacement and new investment activity in the auto home and retail segments.
And opportunities in the spectacular segment.
Mr. Tanker segment includes multimillion dollar projects at our discretionary choices, why customers, which could cause up and down ups and downs and timing and trends.
The transportation business in the U.S and Canada remains strong due to continued investments in the U.S transportation systems, the stability of federal funding and increasing advertising an on premise promotional application needs in mass transit facilities.
In all of our markets, we have a natural replacement cycle and strive to serve our customers with their needs today as well as in the future.
We have recently introduced indoor narrow pixel pitch offerings and see a receptive market for these products across our business.
We continue to foster and build out indirect sales channels, our range of solutions and global capabilities Midcoast the industry's most experienced digital display provider.
And to support our customers over the long term, we're focused on developing and re leasing innovative solutions and services tailored to different applications in each segment.
During fiscal 2020, we are continuing to invest at higher levels in our development and are making investments in the technologies and techniques of using micro early these.
These technologies will open up new markets and create competitive advantages for us while serving the needs of customers desiring to improve the way that connect and interact with their customers and audiences.
As we enter the second half of fiscal 2000, and with a strong backlog in a positive positive outlook. We are focused on increasing orders as we see are growing global customer base and commercial sports and government markets.
We plan to continue to invest in product development activities for new technologies and advanced manufacturing techniques.
Finally, we are focused on carefully managing capacity in spend in our path of long term profitable growth.
With that I would ask the operator, please open the line for any questions.
As a reminder, scotia horsepower ones and the telephone.
Two questions pressed upon bluestone by local dial the Q.
Our first question comes from the line opens the Springer from singular research. Your line is open.
Thank you good morning, I wanted to ask about the if you could give us a little more color around the increase in product delivery costs was that across all business segments are focused in special segments.
Oh, it was primarily in our segments with the larger projects, so a little bit through live events, a little bit through commercial.
That's probably were the two more significant areas.
And do you think that's going to be a challenge in the second half of the year as well or do you expect that to approved.
I think we're continuing to improve our processes over time and that should.
And prove itself.
Okay. Thank you.
Okay.
Our next question comes on the line of Greg Pendy from Sidoti and is now open.
First one I just wanted to ask on live events, you're saying that you expected business to be similar size to previous years, assuming the last year you had some pretty.
Well for weakness will firm up mistaken in the second half are you expecting when you say similar year can you go back a few years are you talking specifically to 29 team.
I think the market will go up and down depending on the projects that are available and the larger projects. So I would turn to draw some type of continuity across multiple years soon and take out a variance in a one year here or there.
Okay got it that's helpful. And then I just wanted to also I guess go into the curves.
Thanks, slightly more than 10 million, so a little bit more pressure than you were expecting one q. I think you were expecting around 10 million on the component pressure.
I think actually it's that's a pretty dynamic area. So at 10 million is probably a conservative area. We're continuing to focus on ways to minimize those costs than in both the components like you mentioned on the pricing there as well as the tariff costs, though.
Maybe I'd say, it's more around the 10 million dollar area and Pat.
Okay. That's great. Among one more final thing can you just talk a little bit about warranty expense I think we're starting to anniversary some more normalized warranty expenses I just kind of how we should we think about that going forward.
Yeah warranty is.
Well, we install our displays in environments are and we don't expect guide ever to be zero, we would like to see that at 2% or less and so as we're as you indicate were injury and more of a range that is.
We think this is closer to a long term sustainable.
Level.
Okay. That's good consulate hopefully helpful. Thank you.
I appreciate the comments.
I'm showing any for this for the question at this time I wouldn't like to turn the call. Thanks to.
Understood. Thanks.
For any closing remarks electric thanks, everyone for the participation on the call today and that there's going to be a change going forward to adapt to the current environment. We're planning to host earnings calls semi annually rather than quarterly on into the future.
Future calls would take place.
At this time, Jay after our second quarter generally in November the year and then after our year end on which was generally near the end of May for that call. We will continue to release.
Quarterly results in a commentary in earnings releases as well as our SEC filings and we periodically appeared to investor call conferences through the years.
As you have any questions or comments on future releases were on today's discussion. Please direct to shield as noted noted in the earnings release, when you can always email investor at Tektronix Dotcom.
With that we hope everyone in the US with lease has a great Thanksgiving and we wish you all a wonderful holiday season, and a prosperous new year, we'll talk to you all remaining.
Ladies and gentlemen, this concludes today's conference in gear. So your participation you may now disconnect.
Yes.
Good day, ladies and gentlemen, and welcome to doctoral next fiscal year <unk> second quarter earnings results Conference call.
Sorry, My God. This conference maybe recorded today, let's say that looked like a seventh 2019 and is available on the company's subsides, a triple double dot dot phonics dotcom.
So I'm all participants I listen only mode.
So to speak up or severe show the old that question as I just Sasha.
That's a question during the session to lead the bus bar one fund the telephone.
It varies quite a different nursing students who expressed by nature.
I'd now like to turn the conference I went through this show Anderson Chief Financial Officer for Dr products or some introductory remarks. Please go ahead.
Thank you good morning, everyone.
Thank you for participating in our second quarter earnings Conference call I would like to review our disclosure as cautioning investors are just that that's not in addition to state.
We will be discussing forward looking statements, reflecting our expectations on plans about our future financial performance at future business opportunities. All forward looking statements involve risks and uncertainties, which maybe out of our control and may cause actual results to differ materially.
That's right.
Changes in economic condition changes on the competitive market landscape, including impact that well will trade discussions the policy management of growth timing and magnitude of future orders that contract.
Fluctuations the margins introduction of new products and technologies and other important factors noted that detailed in our 10-K attacks you see violent.
With that let me highlight some of the financial results for the second quarter.
And year to date difficult 2020, and the related type comparisons at the school 2019.
As a reminder, fiscal 2020 of the 53 week year at fiscal 2019 was a 52 week here the extra week fiscal 2020 fell within the first quarter, resulting in a six month and that being 27 weeks versus 26 weeks.
Sales orders in all areas of operating expenses were impacted what the additional week and a six month comparison.
For the second quarter overall orders remained relatively flat as compared to last year second quarter.
Good day, ladies and gentlemen had welcome Dr. Tronics fiscal year, two end up where do you second quarter earnings results Conference call.
I was only might go this conference will be reported today Wednesday that looked like a seventh 2019 and is available on the company's subside a triple double dot Dr. Onyx dotcom.
At this time, all participants I listen only mode.
After the speak up or said Bisha the old that question as I mentioned session lots of questions. During the session to lead the bus bar one fund it's awful.
We acquired the Fergerson instance lease percentage or.
I'd now like to turn the conference I went through this she'll Anderson Chief financial Officer for Docgenix or some introductory remarks. Please go ahead Jim.
Thank you good morning, everyone. Thank you for participating in our second quarter earnings Conference call.
I'd like to review our disclosures cautioning investors on participants, but in addition to statements of historical back we will be discussing forward looking statements, reflecting our expectations plans about our future financial performance.
It's your business opportunities all forward looking statements involve risks and uncertainties, which may be out of our control and may cause actual results to differ materially.
That's right Rep include changes in economic condition changes on the competitive market landscape, including impact the well trained discussions on policy management of growth timing and magnitude of future orders that contract fluctuations of margins the introduction of new products and technologies and other important.
Factors noted as detailed in our 10-K attacks you FCC filing.
With that let me highlight some of the financial results for the second quarter.
And year to date fiscal 2020, and the related time comparisons difficult 2019.
As a reminder, fiscal 2020 of the 53 week year at dusk till 2019 was up 52 week here the extra week fiscal 2020 fell within the first quarter, resulting in a six month end up being 27 weeks versus 26 weeks.
Sales orders in all areas of operating expenses were impacted what the additional week and the six month comparisons.
For the second quarter overall orders remained relatively flat compared to last year second quarter orders increased in the international at High School Park in Recreation business units and decreased and the transportation commercial and why did that.
For the year orders are up 8.9% light investment International orders increased went for park, partly offset by declines and transportation and High School Park and recreation orders commercial orders were flat year over year.
The volatility of order timing for large projects in global account varies according to the needs of our customers and as the primary reason for changes on the quarterly and year to date comparison.
Each business yet was impacted by the additional weekend at the school 26 month result.
Harrison workers pent up $12.5 million per week in fiscal 2020, as compared to $12 million. During the same time last year or about a 4.8% increase.
On a year to date basis, some additional highlights on the business units with the largest level of order or changes.
And my view that orders increased because of being sick, but that's only winning several projects. Many active college and university market and winning a multimillion dollar project at a professional baseball stadium.
And the international business units.
We market to customers and geographies outside the U.S. than Canada, including areas like transportation and governmental sports and commercial for the first half a year. We have had continued success in global and regional out of home advertising customers as they continue to build out their digital network and have had continued success in projects for more.
The casino sports complexes and transportation stations around the world.
Well High School Park and Recreation is down in orders for the years compared to last year's record level. The market remains active and interested in larger video systems and standards, scoring an audio applications.
Sales for the second quarter fiscal 2020 increased 1.3% and were $175 million compared to $173 million last year.
Net sales increased in lighting that transportation <unk> international and decreased in the commercial High School Park and recreation areas.
This change in sales correlates to the change in orders already described and the related timing of these orders and backlog engine sales.
On a year to date basis sales are up at all business units due to the increased backlog coming into the year, along with the or changes already noted.
For comparison to the 20 726 weeks six month asset sales revenue pace that $13.2 million per week in fiscal 2020 as compared to $12.6 million. During the same time last year or around a 4.6% increase using this comparison.
Gross profit for the quarter as a percentage of net sales was 22.9% of compared to last year, 24.8%.
Drop for the quarterly comparison was the result of additional project delivery cost and tear ups as compared to the last year. During the same quarter tariffs were approximately $1.4 million for the quarter.
Gross profit for the year was 24.1% as compared to 24.8% and difficult 19, the approximate amount of tariff costs for the six months ended were $3 million compared to <unk> point $3 million last year at the same time.
Warranty as a percentage of sales decreased the 2.2% compared to 2.5% for both the quarterly and annual comparisons.
Operating expenses for the second quarter fiscal 2020, or $35.3 million compared to $33.7 million second quarter fiscal 2019, or an increase of 4.5% primarily due to our continued strategic initiative and investing in new products and technology and really.
It's personnel Pops.
We are evaluating and engaging in our operational improvements to reduce the efforts.
Livery, making investments in tools and systems to support and leverage future growth as well.
On a year to date basis operating expenses.
Have increased 11.7, primarily due to the extra week and continued improved investment and development personnel related expenses as an increased marketing effort.
We calculate the provision for income taxes directly in our curious by applying an estimate of the annual effective tax rates to the year to our our year to date income or loss, excluding unusual and infrequently occurring discrete items for that reporting period, the effective tax rate fluctuate depending on changes in tax legislation actual geographic.
So taxable income and level the tax credits as compared to actual tax income.
The effective tax rate benefit for the second quarter fiscal 2020 was 63.8% compared to an effective tax expense of 5.8% of your earlier and 14.5% benefit as compared to the minimal tax rate last year on a year to date basis, that's different than effective tax rate was primarily driven by larger.
I made a tax credits in relation to the estimated pretax book income in each period.
We estimate an effective tax rate benefit of approximately 14.5% for the rest of fiscal 2020.
Our cash and marketable securities possession was up $33 million at the end of the quarter, we use $10 million of cash from operations correlating with the increase in inventory to support production of backlog in future quarters and was primarily attributed to the increase in receivables and contract assets for projects in process at the end of October .
We use $9.7 million for investments in capital for new production system capabilities, and information systems infrastructure and $20.6 million product development, we is $4.5 million for dividends and $1.7 million for stock repurchases. So far during this year.
We expect capital expenditures to be.
$20 million to $25 million for fiscal 2020.
And to be used primarily for new production equipment for new products related reliability lab equipment and manufacturing facility improvements along with investments in our information technology infrastructure and systems.
Our product backlog cats is at $182 million, which we expect to convert this sales over the coming two to three quarters.
We expect sales for the third quarter fiscal 2020 to be more than last year's third quarter due to the larger backlog, but of course sales could change pending project bookings and customer schedule changes.
I'll now I'll turn it over to reduce kurtenbach, our chairman President and CEO for a few additional comments. Thank you shave off good morning, everyone.
Highlighted we had a strong start for orders in fiscal 20 growing.
The overall market also grows we continue to invest in development and have more solutions to market more customers than ever before this work coupled with our other investments to increase our capabilities and sales manufacturing and service poisonous for long term profitable growth.
As an example, our sales team and service networks reach around the globe and our valuable assets for both our sales partners and customers.
Solutions like ordinarily pixel pitch displays are being adopted by new and existing customers around the world, especially for these new indoor product lines, we continue to explore and develop new channels to sell through often with integrator second incorporate our products into locations like corporate offices control centers and retail stores.
Yes.
Our control and content management offerings have also been enhanced.
Proving the way our customers utilize our systems and providing greater use of used to help them in form and entertain their audiences.
Just greater demand for both control system upgrades as well as new system purchases.
To highlight a success in this area. We recently completed an installation in Las Vegas at the Venetian.
Cnos Sportsbook area and look forward to install and other similar installations. We're also focusing on our ability to provide merrell pixel pitch technology, just public sector, including federal and Department of Defense applications. These solutions, along with the needs and applications of government network operation centers.
Command centers situation rooms conference rooms theaters and offices.
Like many other us companies, where in the midst of a dynamic and volatile global trade environment.
Today, we are most impacted by the administrations of both China.
States and the different measures to impose trade barriers between these countries as well as the current rather where rhetoric surrounding these activities.
We continue to monitor and evaluate this situation for multiple perspectives and we will continue to adjust our sourcing production methodologies to minimize impact to our customers and to tektronix, while providing high quality high value solutions at a competitive price.
However, in our current view, we estimate the tariffs on components could impose more than 10 million in cost for us this year.
We do remain positive regarding the overall outlook of the business and growth for the industry for fiscal 2020 M. beyond.
We protect applications or digital solutions will continue to grow and expand in all business units specifically in international with our establishment of localized sales and service channels, our sales focus on increasing market share and our current outlook on non opportunities, we expect growth in sport auto home strict.
Tax cover and transportation areas outside the U.S and Canada.
Looking into the why because business, we expect some growth over the long term. However, we predict a similar sized business as previous years, driven by replacement cycles and new product uses.
One caveat that this business is lumpy, primarily consisting of larger contracts and can be highly competitive creating some variation from year to year.
We expect sustained demand for larger sized orders through the adoption of video exporting applications in the high School Park and recreation market.
And our commercial business unit, we see growth opportunities because of expansion of solutions of indoor applications.
You'd replacement and new investment activity in the auto home and retail segments.
And opportunities in the spectacular segment.
Spectacular segment includes multimillion dollar projects that are discretionary choices, why customers, which can cause up and down ups and downs and timing and trends.
The transportation business in the USA and Canada remains strong due to continued investments in the US transportation systems, the stability of federal funding.
Increasing advertising and on premise promotional application needs in mass transit facilities.
And all of our markets, we have a natural replacement cycle and strive to serve our customers what their needs today as well as in the future.
We have recently introduced indoor narrow pixel pitch offerings and see how receptive market for these products across our business.
We continue to foster and build out indirect sales channels, our range of solutions and global capabilities make us the industry's most experienced digital display provider.
To support our customers over the long term, we're focused on developing and re leasing innovative solutions and services tailored to different applications in each segment.
During fiscal 2020, we are continuing to invest at higher levels than our development and are making investments in the technologies and techniques of using micro eightys.
Technologies will open up new markets and create competitive advantages for us while serving the needs of customers desiring to improve their way that connect and interact with their customers and audiences.
As we enter the second half of fiscal 20 with a strong backlog in a positive positive outlook. We are focused on increasing orders as we see are growing global customer base.
Marshall Sports and government markets.
We plan to continue to invest in product development activities for new technologies and advanced manufacturing techniques.
We are focused on carefully managing capacity and spend in our path of long term profitable growth.
With that I would ask the operator, please open the line for any questions.
As a reminder, gas crusher, let me first of all onetime telephones.
Two questions first.
Please standby local involved the Q and they lost.
Our first question comes from the line Okay. So Springer from singular research your line is open.
Thank you good morning, I wanted to ask about the if you could give us a little more color around the increase in product delivery costs was that across all business segments are focused in special segments.
Oh, it was primarily in our segments with the larger projects, so a little bit through life events, a little bit their commercial.
That's probably where the two more significant areas.
And do you think that's going to be a challenge in the second half of the here as well or do you expect that to approve.
I think we're continuing to improve our processes over time and that's it.
And prove itself.
Okay. Thank you.
Okay.
Our next question comes on the line of Greg Pendy from Sidoti and is now open.
Well first one I just wanted to ask them live events, you, saying that you expect to business to be similar.
Size the previous years.
Last year, you had some pretty.
Well for a week vessel from not mistaken in the second half are you expecting when you say similar years can we go back a few years are you talking specifically to 29 team.
I think that market will go up and down depending on the projects that are available.
Projects, So I would turn to draw some type of continuity across multiple years and take out a variance at one year here or there.
Okay got it that's helpful. And then I just wanted to also I guess going into the curves.
Thanks, slightly more than 10 million so is that a little bit more crusher, then youre expecting one q. I think you were expecting around 10 million on the component pressure.
I think actually it that's a pretty dynamic area. So 10 million, it's probably a conservative area, we're continuing to focus on ways to minimize those classes in both the components like you mentioned on the pricing there as well as the tariff so.
Maybe I'd say, it's more around the 10 million dollar area and Pat.
Okay. That's great one more final thing can you just talk a little bit about warranty expense I think we're starting to anniversary some more normalized warranty expenses just kind of how we should we think about that going forward.
Yeah warranty is.
Well, we install our displays and environments are and we don't expect I'd ever to be zero, we would like to see that 2% or less and so as we're as you indicate we're entering more of a arranged I just.
We think this is closer to a long term sustainable up.
Level.
Okay. That's good that's what role helpful. Thank you.
I appreciate the comments.
I'm showing any.
For the question on peacetime outdoor like to turn the call that.
Understood. Thanks.
In closing remarks lunch and thanks, everyone for the participation on the call today and that there is going to be a change going forward to adapt to the current environment, We're planning to host earnings calls.
Hi annually, rather than quarterly on into the future on future calls would take place.
At this time Gen. After our second quarter generally in November leisure and then after our year end on which is generally a near the end of May for that call. We will continue to release.
Quarterly results on a commentary in earnings releases as well as our SEC filings and we periodically appeared to investor call conferences through the years.
So as you have any questions or comments on future releases or on on today's discussion. Please refer to shield, let us know to noted in the earnings release, when you can always email and investor at Tektronix Dotcom.
With that we hope everyone in the U.S. with lease has a great Thanksgiving and we wish you all a wonderful holiday season in a prosperous new year, we'll talk to you all in May.
Ladies and gentlemen, just a good cities conference. Thank you for your participation you may now disconnect.