Q1 2020 Earnings Call
Greetings and welcome to the construction partners first quarter earnings Conference call.
This time, all participants are they listen only mode. A brief question and answer session will follow the formal presentation.
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It's now my pleasure to introduce your host Rick Black Investor Relations for construction partners. Thank you. Sir you may begin. Thank you operator and good morning, everyone. We appreciate you joining us for the construction partners conference call through your first quarter fiscal.
2020 results.
This call is also being webcast and can be access to the audio weighing on the events <unk> presentations page of the Investor Relations section of construction partners Dot net.
Information recorded on this call speaks only as of today February 720, 20. So please be advised.
At any time sensitive information may no longer be accurate as of the date of any replay.
I also would like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events for future financial performance are considered forward looking statements made.
Hey, pursuant to the Safe Harbor provision for the private Securities Litigation Reform Act So 1995.
We will be making forward looking statements as part of today's call that by their nature are uncertain and outside of the company's control actual results may differ materially.
Please refer to the earnings press release there.
Was issued this morning.
Our full disclosure on forward looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.
Management will also refer to non-GAAP measures, including adjusted EBITDA.
Reconciliations to the nearest GAAP.
As can be found at the end of earnings press release construction partners assumes no obligation to publicly update or revise any forward looking statements.
Now I'd like to turn the call over to construction partners, President and CEO Mr. Charles I once Charles.
Thank you Rick and good morning, everyone with me I want to.
Our call today, our niche Fleming, our executive Chairman and Alan Palmer, Our Chief Financial Officer, I will start today by providing an update.
On our first quarter and I will then turn the call wrote a need for few additional comments finally, Alan will review our financial results before we take a questions.
We're pleased with.
So much in the first quarter that produced double digit year over year growth in revenues gross profit and adjusted EBITDA.
This growth was driven both by improved performance and our existing markets and by recent strategic acquisitions in Florida and Alabama.
The.
First half of our fiscal year historically produces approximately 40%.
Our annual revenue based on the seasonality of our business and these first quarter results are in line with our expectations.
It could change to see sustained demand across right.
33, understate markets for road repair and maintenance work.
We also see sustain competition and this business, we're competing everyday for war.
Our team is focused on reducing costs and maximizing efficiencies throughout our organization and.
Construction project work to achieve profitable growth.
It is important to point out that the flexibility of our model provides opportunities to pursue projects that will allow us to enhance the utilization of our workforce on equipment when container.
It could pursue.
Projects, both public and private that all presents the best opportunity the gross profitability.
Another key aspect of our business desired geographically diverse diversity.
Operator, well across 33 separate markets in multiple states, we have exposure to different.
Economic environment, I want to private shot and own the public side, we have five different state deal keys, and a large number of other public entities that we can work with throughout these markets.
There's diversity allows us to bid on both public and private projects to maximize our.
Vertically integrated business model.
Turning to our recent acquisitions.
We have totally integrated acquisition, we've made in October.
Which is a hot mix asphalt plant and pay the company and high grade.
Reality, Florida East Coast, we have now successfully.
He did five acquisitions since our IPO in May 2018 at a total of 20 acquisitions.
Family of the business and 2000 anymore.
We're pleased with its a full much of the operations, we acquired in Florida, and Alabama, we can change to see growth opportunities.
Those markets in Florida in particular, where we now have a broader footprint in the eastern shattered the state.
We expect these markets to benefit from the close proximity and enhance vertical integration when our diverse equipment fleet and work for capable.
I will make it broke range of services, we believe they are meaningful opportunities to add scale drive growth and provide value for customers.
As we progress through.
Physical 2020.
We will continue to consistently executing this strategy.
Did you have been drove profitable growth utilizing three primary lever.
I do want more work in our core market by making strategic acquisitions and by expanding through a greenfield opportunities.
We continue to have active conversations with potential acquisition candidates.
We also remain patient with acquisition opportunities and evaluate prospects that best fit our strategy before turning the call over that needed I would like to thank our senior management team for their leadership and I would also like the thing our more than 2200 employees for their dedication.
And hard work that enable us to execute our strategy.
Now I turn the call over the net lending our executive chairman for a few additional comments NAD.
Thank you Charles and good morning to every one.
The team delivered an excellent first quarter as Charles and Alan Edrick.
Many times this is a seasonal business that ramped up throughout the year and expand from both a topline and they profitability standpoint during the second half of the year. So as we evaluate our first quarter results and look at the opportunity to come throughout the year.
With a combination of projected company growth any number of potential acquisition.
In markets of interest as we are truly excited about our future.
Quite simply the positive supply demand dynamics of our business have remained pretty much. The same since we started CPR in 2001.
Those are deteriorating and local state and federal government funds are being used to repair them in fact I'm.
I'd argue that those dynamics or even better today, because the Tiering road conditions across the country have not improve and in most places abortion.
And more and more states are taking ownership by implementing gas taxes to help maintain an improved roadways and their states.
Which is exactly what has happened in all.
The states we operated.
As Charles mentioned, we have a flexible model, enabling the team to work on private or public projects across the 33 unique many economies in which we compete.
Some of our markets are experiencing good economic growth right now others have less.
And others might be down or slightly flat, however, our broad geographic diversity bring stability and consistency to the company.
Also we have the flexibility to move equipment.
Incruse and the ability to do different size and all type projects, which further.
Richard says for many of our competitors.
Over the last 20 years.
Our business model has shown resilience and consistency in different economic and competitive environment.
The team is committed to continually improving business processes.
To grow revenues.
And margins.
The opportunities today to utilize technology integrate more efficient processes benefited from a more flexible organization.
To drive efficiency are terrific.
As the entire CPR teams continue to execute at a high level led by seasoned and experienced.
Operator is across the organization, we plan to continue to deliver strong results consistent with our strategy for achieving control.
Profitable growth.
Throughout the year, we plan to continue to tell our story to investors, which we believe provides a very compelling investment thesis.
The team continues to.
Work hard to enhance financial results cash generation and maximize value for shareholders as little as all the stakeholders.
And with that I'd like turn the call over to our CFO Allen Paul.
Alan Thank you needed and good morning, everyone.
I want to start my quickly highlighting our key performance.
Metrics on the first core.
But the actual standpoint, as Charles mentioned year over year growth in the first quarter was driven by improved performance in our existing markets and by recent strategic acquisitions, and Florida and Alabama.
Revenue for the quarter increased a 175.3.
Hey, good up 21 million over the same quarter last year.
Organic revenue growth was approximately 7.9, Megan and acquisitive revenue growth was approximately 13.1, Megan attributable to acquisitions completed subsequent to the quarter ended December 31st 2018.
Gross.
Profit increased to $23.8 million up approximately $2.6 million over the same period last year, primarily due to higher revenue.
Our margin.
Net income was $5.5 million up from $5.2 million compared to the same quarter last year earnings per share.
Or 11 cents compared to 10 cents per share last year.
No that interest expense declined approximately $235000 compared to the same quarter last year due to a decrease in the average interest rate as a result of amending our credit agreement in June 2019.
Our effective tax rate was 19.5 per cent compared to 24.3% for the same period last year.
The lower effective tax rate was due to a discreet tax reduction of $363000 in the quarter related to an amended state income tax return.
We.
Back to our effective tax rate for the remainder of the fiscal year to be approximately 25.2%.
Adjusted EBITDA increased approximately $2.5 million to $17.2 million, resulting in an adjusted EBITDA margin of 9.8% compared.
The 9.5% than the first quarter last year.
Our adjusted EBITDA was a combination of a higher gross profit and depreciation depletion and amortization, partially offset by an increase in general and administrative expenses.
General and administrative expenses were.
$17.1 million in the first quarter 2020.
Compared to last year, a $14.4 million. The 2.7 million dollar increase was primarily the result of a 1.4 million dollar increase in management personnel payroll and benefits.
797000.
Salary increase attributable to acquisitions completed subsequent to December 31st 2018.
395000, dollar increase and stock compensation expense.
Turning now to the balance sheet at December 31st 2019, we had $49.4 million.
Our some cash and $13.6 million of availability under our 30 million dollar revolving credit facility after deducting outstanding letters of credit.
Our debt to trailing 12 months EBITDA ratio was less than one time 0.73.
We have a very strong balance sheet.
Support our growth opportunities.
Cash provided by operating activities was $1.5 million from three months ended December 31st 2019 compared to $1.2 million. The three months ended December 31st 2018.
Capex in the first.
Quarter of fiscal 2020 was $23.6 million.
Excluding approximately 11.5 million to purchase certain equipment that was previously subject to operating leases. Our capex was 12.1 million in the first quarter compared to $7.4 million in the same quarter last year.
For fiscal 2020, we expect our capital expenditures to be in the range of $44 million to $47 million. Excluding the 11.5 million dollar purchase of equipment that was previously subject to operating leases.
Project backlog at December 31st 2019 was 530.
$9.1 million.
Payer to 531.6, Megan at September Thirtyth, 2019, and 572 million at December 31st 2018.
Of our current $539 million on backlog approximately 75%.
Or $403 million is expected to be completed during the remainder of our fiscal year.
We maintain a construction backlog composed primarily of recurring maintenance related projects at the time that we.
Refer and we continue to see.
He used to bid on these projects in our markets.
Keep in mind that we focus on our backlog and 33 distinct markets, meaning we want to have six to nine months of backlog in our markets. As these market specific backlogs are aggregated for our company wide backlog, while the overall.
Well can fluctuate quarter over quarter based on several large projects, they're being added or completed we focus on the overall helped the backlog in terms of the next 12 more months in each specific market.
We also maintained a disciplined approach to strategically focus on were occurring.
Care and maintenance projects.
Historically, our backlog bills during our second and third quarters as more of these projects are typically let in February we might.
We're maintaining our full year outlook for fiscal 2020 based on our historical experience of generating approximately 40% of our revenue.
And the first half over the fiscal year approximately 60% during the second half.
Our fiscal year 2020 outlook with regard to revenue net income and adjusted EBITDA are as follows revenue of 830 to 870, Megan compared to 783.2 million in fiscal.
Your 29 today.
Net income of 39 to 44 million compared to 43.1 million in fiscal year 2019.
Adjusted EBITDA of 94 to 102 million compared to 92.3 million in fiscal year 29 tanks.
In summary, we are pleased with our first quarter results and we continue to see positive market trends and project demand in fiscal 2020.
With that we'll now take questions operator.
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Our first question comes from the line of Michaels manager with Bank of America Merrill Lynch. Please proceed.
I will move onto our next question, which comes from the line up Adam Thalhimer with Thompson Davis. Please proceed with your question.
Hi, good morning, guys nice quarter.
Good morning.
So can you give us a little more color on you said you like to have six to nine months of backlog in your specific markets can you give us a little more color on how you're are you guys view the <unk> current level backlog.
Considering the time of year, we're we're pleased with it.
We do expect with the projects that we've got available coming up in the next few months than what we've already seen spores. Our bid results in January for that to build Lucky typically would.
Going into the to the sector the into the second.
Okay, and then now there will not be as much build in the third and fourth goes we do so much of our revenue but.
We see a lot of good opportunities out in front of us in many of our markets to be able to build that backlogs and more.
Okay, and then curious on.
The seasonality.
Of EBITDA last couple of years EBITDA decline from December.
To March before picked up in the back half is that.
Where do you expect a similar trend this year.
Yes, there's generally our volume in our second quarter, which is January or.
Through March is the lowest volume of the year. So a lot of the fixed cost that we incur in January, especially in repairs of plants and equipment in the slowdown.
They impact that margin our job margins are fairly consistent throughout the year, but.
Plants in it.
<unk>.
Counts are the ones, where we have a lot of fixed costs that will incur in that quarter with a lot lower revenue. So.
That's usually our lowest.
Gross profit.
Core.
Okay. Thank you.
Good.
Thank you. Our next question is from Michael Furniture with Bank of America Merrill Lynch. Please proceed with your question.
Okay.
This is how did your line of life, yet can you hear me.
Yes, yes, sorry, yeah. Good morning, sorry about that I think.
I might have.
I apologize I, thank God and I'm, sorry, if I make you guys repeat repeat your question here.
With.
Maybe we could just touch on SGN I think it was pretty high as a percent of sales I know, there's a seasonal impact.
Lower revenue.
Maybe just touch.
Touched on this with that with the question prior but is there anything we should be aware of with cost from from new acquisitions or something that was running a little bit higher in the first quarter and how that might trend through the rest of the year.
Oh, yes in the first quarter, we had about $800000. So.
Gionee that was related to acquisitions that we didn't have in the same quarter.
Last year, so year quarter over quarter. This year to last year that was part of that we also.
Had some.
Oh about 400000 dollar so.
Non cash equity related.
To the directors last year chose to take their director's compensation in stock and instead of cash and so that was a non cash that we did not have in the same quarter last year.
Then the other was just primarily increase in staff that we've added.
In the administrative level. We also have some expenses in our first quarter that occur in that quarter for safety awards. Another type of employee costs that generally are they're paid prior to in December prior to the.
End of our first quarter, so that kind of bump up that first quarter that amount should trend down in the second third and fourth quarter absent any additional acquisition. So the run rate in overhead in in this first quarter should be the high cash for the year.
Okay. That's.
That's very helpful. And then I'm just curious like the fast Act authorization I think expires in September.
The September this year look I think you guys have been message for a long time you've seen this this before I'm just curious if you could flag to us how.
We should.
I see the market's evolving how do you too, but just kind of evolved as we approach September if if any changes at all.
Hi, This is Charles we really don't see any major impact at all you know is just kind of.
Almost.
Become standard for these things to expire and then the good.
Funded through to see ours until you know.
So we really don't anticipate Amy.
On a slowdown which deal down a lot of a tailwind in our back with a lot of the stage ditch gas taxes.
Just have kicked in and they continue to kick in.
Obviously, we don't have anything and our model based on anything new.
But we just think he is going be a business as usual.
We are.
The state of the Union address and then.
Rebuttal Baba the Democratic Party I think there first comment was about infrastructure Bill So you're certainly a.
Consensus across all the political spectrum to get something done and we're hopeful that that might get done before the fast act expires, but as Charles.
If it doesn't continuing resolutions or normal part of it and Deo Taser gotten very accustomed to they had in the last 10 years.
That makes sense and if I could just squeeze one on the on the private side I mean, I know, we're talking a lot about the public side. Just are you guys observing anything in your and your districts in the private side.
Data suggests alarm there's been some concerns on the on the Nonres construction side and in some areas in some states I'm. Just curious if you guys are observing any of that in your book of business.
You know the private side, we still see and lot of commercial and we're still seeing.
Little bit though.
Residential decks kind of been normal, but that's a business that we don't chase to heart is the.
The ones related strictly to residential development show.
Cause a little bit of their cycle holiday, but in the market said, we're and you know we're.
We'll see in a very strong the economy, we still see in a lot of work being let Dan so for us.
The market jet, we and were very positive that that is going to be a continuation for the next several much.
Fair enough.
Thank you we'll move on to our next question, which comes from Andrew Wittmann with Robert W. Baird. Please proceed.
Great. Thanks, Good morning, guys I.
I guess my first question is probably here for Alan.
And just wanted to talk about the Capex number you guys called out last quarter very clearly that you'd have this kind of operating lease buyout. Alan I was hoping you could just give.
Yes, just give all the investors here a little bit of flavor. The types of things that were involved in those leases and if you could it would be very helpful. For you to quantify the amount of lease expense or rent expense on those operating leases that was previously expensed. That's now going to turn into depreciation on a go forward basis.
Okay.
The.
Now that we bought out in October was 11.5 million this the fair market value.
Those leases so.
From a depreciation standpoint that would equate to approximately $2 million a year.
I don't have an exact.
Lease.
Expense a mile but it probably would be.
Two and a half million dollars I would say.
But I can get I can get that exact number because we we did our analysis or whether to bought out but.
So that and that was for us that.
Just figured into our 2020 budget because we knew we were going to do those because those leases we're going to go on our books, one way or the other.
As a capital asset and then we also have you when you look at the balance sheet, you'll see that we we booked about another.
$8.5 million worth of the value of of operating lease assets, because we became subject to the new lease standards October 1st.
But.
The to the first part of the question all of that.
I would would have been.
<unk>.
Related that we that we bought out so those would have been operating leases for bulldozers rollers.
Trucks.
Good number of dump trucks that we had leased and then some other heavy equipment. So that's the type of things that we had.
On operating leases.
We still how some of that but we have a number of locations that we leased property that our asphalt plants are sitting on whether it be in a quarter just outside of a corey.
And so that is the majority.
Already what is in that operating right of use asset.
So.
There are some additional yellow iron but.
Not a lot.
That's helpful color. Thank you for that and just kind of another aspect here the cash flow here that is a calculated.
For the Dsos are.
Up a decent number of days sequentially.
And I was just wondering if you could kind of give some of the mechanics behind that certainly the fact that you Didnt acquisition in the quarter you don't get all the revenue in that quarter from that acquisition, but you do book all the receivables after imagine that's part of it but I don't know if you.
Could help if you got to help just understand what's going on here because last quarter. You know there's a lot of discussion about how there are some state deal to use that we're paying your kind of slow and you thought you catch up on that and so I just thought it'd be helpful for everyone. So to here a little bit about all the status of some of those receivables that its.
Talked about last quarter and have it relate back here to the DSL calculation.
Yes.
We do expect to for that to have the delays from the deal to have less impact as we go through the year.
Fortunately the first quarter.
December.
Perfectly into there a lot of holiday season.
While our accounts payable people weren't taking off we kept pay in our bills a lot of the customers took advantage of the holidays and said that pay us in January so.
From my past due standpoint, which is really what we look at.
We are still in good shape. There we have very few write offs of receivables.
And certainly not on the public side, but the delay in collecting some of them.
Still it's still real but it should not it should not increase and we do feel like we can.
Back a little bit more on track and the second quarter, because we won't have the holidays, where they take all for the.
Last week or two this which is when we often get paid from the cities.
Okay. That's helpful. And then I guess just my last question here has to do with the common for their prepared remarks, you kind of mentioned that.
Lets you see continued steady growth, but theres also sustain competition. Charles I was wondering if you could just expand upon that a little bit are you seeing ours is the competition pricing any differently are going about their business any differently are you referring to anything and specifically that you saw here during the quarter or or new entrance.
Things of that I, just thought maybe kind of expanding upon that commentary on the competition would be helpful.
From a competitive standpoint, obviously this business is they compete business and as always band, but his board is anything that we see any different than we normally.
Seeing no.
It is.
We were not seeing any designed them I guess the point abroad out was that you know that every job we get that is normally on a comparative bases in.
That's one reason that we have worked so hard to improve our efficiencies in million I understand.
And our market so we can maximize that profitability.
Okay.
I'll leave it there thank you very much.
Thank you.
Thank you. Our next question is from Trey Grooms with Stephens. Please proceed.
Hi, this is actually.
So on for Trey.
Hey.
Hey, good morning, good morning.
So my first question it looks like the adjusted EBITDA margin was up about 30, bips, but came in a little bit lower than we are expecting.
Is it you know inline with your expectations and maybe it was there anything in the quarter that pressured the margins more than than you originally thought.
Oh It was it was very much in line with our expectations.
As far as what we expected.
[music].
We we are jobs performed at a very good level.
In the quarter.
We have enough volume going through the plants and.
The equipment that they were in.
In line actually the plants were slightly better equipment just slightly.
More cost and then we had so overall those were in line.
We were pleased with our.
External sales that.
Tribute to that end the performance of the liquid asphalt terminal so.
We were actually at the gross profit line, we were a little bit higher.
Higher than what we anticipated on that revenue and then I've talked a little bit about the gionee.
You know that was a little bit higher than.
Our expectation was but again part of that due to those costs that come in in that fourth quarter that when we're budgeting they're more.
Equal throughout the year so.
And then we had.
About Oh.
[noise] almost.
One $800000 I think it was.
Acquisition cost in the quarter, so but overall the overall margin was just maybe 10 basis points above what we expected.
Okay. That's helpful. And then just just a follow up on that your guide.
Implies an EBITDA margin of 11.5% how should we think about that.
Last year I think the back half saw that margin, 4% to 5% higher is that good assumption you.
Yes that should be.
That should be pretty much in.
And.
The second quarter, historically is going to be the lowest.
Margin.
If we followed the the typical and then that third and fourth quarter is when it's generally going before five.
No.
For Sam.
Higher and then you average after that that 11, because you're going to about 60% of your work in that quarter. So as not only going to be a higher margin, but it's going beyond that higher revenue.
So we still feel good about our full year guidance.
And then portion we finish our second quarter, we generally give an update on our annual.
Guidance at that time and willpower.
Real good.
Of course that time, we'll know what that second quarter looks like.
Alright, Thanks, that's helpful and I'll leave it there.
Thank you know.
Thank you. Our next question comes from Josh Wilson with Raymond James. Please proceed.
Thanks, and good morning.
<unk>.
Good morning.
First last quarter, you talked about the mix of project flooding, maybe being a little biased towards Mega projects can you talk about.
How that's evolved and what you see that looking like going forward is that normalizing as you had previously thought.
Yeah, when we talked about it last quarter, we were I think we were.
Talking really more about as it related to the backlog and having not built that up some in as much in the third and fourth quarter. So a lot of that what's happening in I'd say the January through.
August September period last year, and we expected we didn't see a lot of mega projects out in the future.
So in that that's still the case, we're not seeing a lot of those large projects out there that eat up a lot of it.
We are seeing a return more to the.
More repaying pair and maintenance type projects.
And.
They are still.
Time before that's going to happen real strongly in North Carolina that was one where they spend a lot on the mega projects in the early part of 19 in kind of got.
A little bit.
And with their budget so we have.
We've been able to stay busy in our markets by shifting a little bit more two cities and counties in private work. Most don't generally give you the big backlog boost because those are generally.
Smaller contracts indigo days, but.
Keeping very busy but the the outlet we see in the next to nine to 12 months just floors projects to be it.
I don't think we've seen a single Mega project in the outlook of video tape projects that we've got coming up in any of our states that are recall.
Got it and then in the December quarter last year, there are some pretty significant weather headwinds or anything to note here and that's pretty representative you think of what this quarter seasonality should look like.
Yes. This was a much closer returned to.
I think.
The percentage of our annual revenue in the first quarters, usually somewhere between 20, and a half and 21.5% of our annual revenue in this quarter was 21% of the low end of our guidance. So very typical had.
Really good start with.
Our November December.
Due to the Christmas and new year's falling in the middle of the week that that was more of a disruption than usual and then we had some.
Unfavorable weather last half a December so we lost a little momentum layer, but overall.
I'd say it was a bigger typical first quarter.
And then last one for me in terms of the.
Yes tax benefits in Alabama.
Yes, you've talked about those ramping up in the back half is that still your expectation.
Definitely.
Yes, we are.
Seeing coming up.
February March.
The cities and counties or got projects, they're letting and that's exactly what we expected.
Got it good luck with an export.
Thank you.
Thank you. Our next question is from Bill Newby.
With D.A. Davidson. Please proceed with your question.
Good morning, Thanks for taking my questions.
As bill.
Charles just wanted to.
Touch on Alabama quickly.
Are you get starting to see bidding activity picked up in that market at all now that you.
You have that transportation place.
I guess, if you havent.
Right and to win that acceleration Mike.
Yes, yes were C and we're seeing the gas tax money being put in place now and we'll see more.
[noise] projects is related to the gas taxiing.
Great. So we anticipate that continue.
As as we go further as you know when you first put something in place we kind of go through a short period of time do you need to collect it before you spend didn't know that's one thing about Alabama DMT, they do a pretty good job in making sure that.
They don't get too far out go would be skis would the.
The project say, let versus the money coming in.
I guess and then just quickly on on the asphalt next cost that are you seeing anything in that market 15, since beginning of the year I guess Im just wondering with IMO 2020.
Please.
Our there's any dynamics that are kind of moving around.
[noise] no we haven't seen anything is really a medini gotten any impact us.
At all about it.
Matter of fact, I think diesel deals down back.
Fairly low right now.
And so we just don't anticipate anything that's going to.
From that impact there's going to.
Having impact on our business.
Bill the the.
Asphalt summit.
Prices normally during the.
When are those will drop and that's what we've seen this year, that's one where we store extra material when the prices lower so really any change in asphalt so man has been more.
Typically what happens in the winter anyway as opposed to.
Any kind of big reaction to IMO 2020, and as Charles mentioned and I think we may have talked about on the call before the prior time. If there was any area we were going to expect.
Much impact or or or much price change it was on the diesel fuel because of what the ships.
We're gonna have to burn in and in fact, we've seen diesel costs.
After probably mid November of just kind of trended down and they really had no spike and of course some of that so a lot more related to the price of all in all this going on in China, but.
We really have not seeing.
Any impact that we would attribute to IMO 22 waiting at this time.
That's great. That's very helpful guys I appreciate it.
Yes.
Thanks, a follow up from Michael side with Bank of America Merrill Lynch. Please proceed with your question.
Hey, guys yeah.
Two quick follow up in apologies if you already addressed this I'm just curious on your pipeline with the acquisitions are you seeing.
And accelerating pace of companies willing to discuss a few maybe family businesses.
Looking to try to get in front of the election or election risk there.
Or is it kind of just at the same kind of pace.
Discussions that of I played out for you as the last.
Few quarters. Thanks.
Alright. Thank you Michael these Charles we're seeing a back to sign pace, which.
But it's hard to getting these things done is the is the sellers.
Because this is big steps and you know when they want to make sure that they make good decisions and get your employees would that we're good people buddies borders so.
I'd, just say as kind of normal pace right now we do have been a lot of conversations.
With the with the.
Pretty good group of people and you know obviously, we feel very positive for this year or.
Some momentum can do.
Okay.
Jason So.
That's kind of where that stands.
Hi, Thanks, guys.
Thank you it appears there are no.
No further questions at this time I'd like to pass the floor back over to management for any additional concluding comments.
Okay. Thank everyone for joining the call today, and we'll look forward speaking we show up on the next.
Conference call and we will remain focused so now were us.
Executing our strategy and hope everyone has a bit week.
Ladies and gentlemen, we thank you for your participation. This does conclude today's teleconference. You may disconnect. Your lines at this time and have a wonderful day.