Q4 2019 Earnings Call

[music].

Good morning, everyone and welcome to Ryan Group Holdings fourth quarter, 2019 earnings conference call and webcast.

Joining me today are Mark suffer Orion Group Holdings, President and Chief Executive Officer.

Robert Tap, our vice President and Chief Financial Officer.

Regarding the format of the call we've allocated about 15 minutes for prepared remarks, which mark and Robert will highlight our results.

And our market outlook, we will then open the call for questions.

For the course of this conference call well make projections and forward looking statements regarding among other things our end markets revenues gross profit.

Gross margin.

EBITDA EBITDA margin backlog projects and negotiation and pending awards as well as our estimates and assumptions regarding our future gross administrative expenses and capital expenditures.

These statements are predictions that are subject to risks and uncertainties.

Including those described in our 10-K that may cause actual results could differ materially from those statements.

Moreover, past performance is not necessarily an indicator of future results.

By providing this information we undertake no obligation to update or revise any new projections or forward looking statements, whether as a result of new developments or otherwise.

Also please note that adjusted net income adjusted earnings per share EBITDA, and EBITDA margin, our non-GAAP financial measures under the rules of the Securities and Exchange Commission, excluding regulation G.

Please refer to the reconciliations and definitions.

So to the most comparable GAAP measures reconciliation tables accompanying this earnings call, but then the press release issued this morning.

The press release can be found on our website at Www Dot Orion Group Holdings Inc. dotcom.

Also for additional discussion of risk factors that could cause actual results to differ materially from our current expectations. Please refer to our quarterly and annual filings with the FCC, which are also available any investor section of our website.

And with that I'd like to turn the call over to Mark Stauffer, President and Chief Executive Officer.

Mark.

Thank you and good morning, everyone. Thanks for joining us today.

Today will discuss our 29 team fourth quarter results and provide an update on on best scale and grow initiative or is G.

The key takeaways from our remarks today will be the past year over year improvement in our top and bottom line performance. The next steps of our process improvement program and our 2020 outlook.

I'll begin by giving an overview of the quarter. Robert will then discuss our financial performance or capitalization and provide an update on expectations for future results in more detail and finally I'll come back to discuss our markets and provide an update on rise key initiative.

I'd like to start by noting our teams outstanding performance in safety during 2019 with both our marine in Calgary divisions, reaching historically low recordable incident rates.

Well this is a remarkable achievement the importance of this is not a in a statistic, but rather in our commitment as a company to watch out for one another and having a safety mindset in performing arts asks whether on the job or at home.

Our goal under our towards Zero program is for all our co workers to go home to their families. Each day injury free.

I want to say thank you all my coworkers for their efforts and looking out for each other and for conducting our operations in a safe manner.

During the fourth quarter, we posted the highest quarterly revenue in company history. More importantly, we were also able to improve our bottom line compared to the prior year period as both the concrete and marine segments delivered positive operating profit.

The improved operational performance of both segments led to increased year over year EBITDA.

Both segments also finished this positive operating profit for the full year as we saw improved execution on projects in our sizable backlog and positive results from our highest ci initiatives, especially around labor and equipment efficiency.

We remain focused on executing our strategy of being a premier specialty construction company and providing solutions for customers across the infrastructure industrial and building sectors.

Our end market demand remains strong as evidenced by our robust backlog of 572 million as of the end up 29 team.

Yes, combined with the operational transformation, we've just let it through a I see initiative supports our ability to deliver improved results as we progressed into 2020.

Now I'll turn the call over to Robert to discuss our financial results for Q4 Nike.

Thank you Mark and thanks, everyone for joining us.

Revenues for the fourth quarter 29, <unk> hundred 99.8.

Compared to 99.2 million in the fourth quarter 2018.

Revenues in the prior year period were impacted by 22.8 billion dollar charge late to customer driven overruns on certain projects in our marine segment.

Excluding this charge a fourth quarter revenues increased by 64% year over year, reflecting our improved execution across both segments.

Fourth quarter 20, My team reported gross profit was my 2.1 billion, that's compared to gross loss of 23.2 million in the prior year period.

Excluding the previously mentioned $23.8 million charge, along with the $4.3 billion reserve on receivables fourth quarter 2018, gross profit was 4.8 million.

The year over year gross profit increased in the fourth quarter well. They result in a better labor efficiency in both segments and better equipment utilization in Italy.

That's DNA expenses for the fourth quarter 20 nitrate work 16.3 month, which compares to 13 million prior year period.

The year over year, increasing its DNA expenses is primarily driven by ice two related cost alone professional fees.

As a percentage of revenues that's in a in the fourth quarter 29, <unk> was 8.2% that's compared to 13.1 person in the previous year.

Excluding $1.1 billion the bodies to everybody calls a fourth quarter 29 seen as gene as a percentage of revenues was 7.6% well below our target of 8.5%.

For the fourth quarter 20, Nightwing reported net income of $159000 or one cents diluted earnings per share.

Which includes 1.3 million or about four cents per share of nonrecurring cost another choices.

Generally related to the ice two initiatives.

Adjusted net income for the fourth quarter 29, Jean was 1.5 million or five cents earnings per share.

Net loss in the prior year period was 94.4 million or a loss of $3.32 per share on adjusted basis. This translated to a loss of $8 million or a loss of 28 cents for sure.

Fourth quarter 2019, adjusted EBITDA was 11 million. This represents an adjusted EBITDA margin of 5.5% compared to 2.5 million when adjusted EBITDA margin of 2% in the prior year period.

Looking at our results of our two segments in the fourth quarter 20 nitrogen our marine segment had revenues of 111.2 million, an adjusted EBITDA of 11.7 million.

This equates to an adjusted EBITDA margin of 10.5%.

This compares to revenue was up 36.9 million and adjusted EBITDA of 5.6 million within adjusted EBITDA margin of 9.4% in the prior year period a.

The year over year improvement in the Marine segment was primarily driven by increased asset utilization and labor efficiency.

Our Marine segment had fourth quarter 2019 revenues of 88.6 million, that's compared to 62.3 million in the fourth quarter 2018.

Adjusted EBITDA for the concrete segment was a loss of $632000, which represents a negative <unk>, 0.7% EBITDA adjusted EBITDA margin in the fourth quarter 2018. This compares to a loss of 3.2 million or negative adjusted EBITDA margin of 5.1% in the fourth quarter 20 aging.

Concrete segment year over year improvement was driven by increased production and increased labor efficiency.

In terms of breakout by customer type the marine segments for quarter 2019 revenues were comprised of 69.5% from government agencies, well, 30.5% generated from the private sector, which is similar to Q4 2018. When you go into government sector, we accounted for 6% to 9% new private sector was 31% entrants.

Yes.

The concrete segments for quarter 2019 revenues were 90% from private sector versus 80% in the prior year fruit.

Now to the bidding metric someone rigs for the fourth quarter 20. It I'd say, we bid on approximately 1 billion worth of opportunities. We're successful on 100. Unfortunately.

This resulted in a book to Bill ratio, <unk>, 0.71 times and a win rate of 14.6% for the quarter.

As of December 31st 29th Street, our backlog was 572 of which 340 million was associated with their marine segment, and 232 million well the concrete segment.

Additionally, where the apparent low bidder or have been awarded subsequent to the ended the fourth quarter 154 million worth of opportunities.

This 71 million as relates to the Marine segment, well 83 million as you like to the concrete segment. In total currently we have over 726 million of projects, which we backlog and low bit an increase of nearly 130 million compared to the same period last year this positions us well for growth.

Now turning to the balance sheet as of December 31st 29 thing you had approximately 13 million of cash in the <unk> revolver availability.

We ended the quarter with 72 million of outstanding debt 35 million of which which relate to the revolver 37 million be relate to terminate.

This translate into a 2.27 times leverage ratio any fixed charge ratio 2.29 times, both well within covenant requirements.

Also we finished 29 p. internet overbuilt position.

Between availability on our revolver and our expectations for free cash generation.

Ample liquidity to support our operations and 2020 plant.

Additionally, our Bonnie program remains solid and is more than adequate to support our bid activities.

Overall as we head into 2020, we're pleased with the level barbecues, we have in front of lives across both of our segments. Our backlog in low bid activity is near record highs and we're optimistic given to help the bid environment with that we expect adjusted 2020 EBITDA to be in the mid to low $40 million range.

To wrap up we're pleased with the progress that has been made in 2020.

We are focused on execution and continued improvement in 2020, now I'll turn the call over to Mark.

Thanks, Robert starting to a review of our market sectors in our Marine segment, we continue to have extensive opportunities.

Both public and private customers for the maintenance and expansion of marine facilities in waterways.

This is reflected in a strong bidding environment, we are seeing and then our expectations of New awards in 2020.

Recreational market continues to be an important driver a project opportunities.

With the cruise industry being the fastest growing category and the leisure travel market cruise lines in particular, our key source of these opportunities.

Newer larger vessels vessels continue to come online driving demand in our markets for construction work on existing peer facility. They put new destinations in peer facility, that's going in cap that can't accommodate these massive vessels.

The energy sector continues to be a source of bid opportunities for both marine and industrial projects.

LNG export terminals represent a sizable part of these opportunities with eight projects under construction and an additional 12 projects currently approved by FERC and plan for construction within our operating footprint.

We expect these along with other midstream and downstream energy driven projects to be a major source a bid opportunities in the years to come.

By expanding our addressable market for project opportunities, we view the industrial sector as a key growth opportunity both in 2020 and in the future.

Our recent award of a $47 million project.

For the Port of New Orleans represents one type of projects and they are one of the types of projects in the industrial space, we are targeting and we're excited about our pipeline of projects in the sector.

Our existing skillset aligns well with work in this space, which in many cases is being driven by or existing customer base, all of which makes it attractive area for good organic growth for awhile.

The American Chemistry Council estimates over 80 billion a plant U.S. refinery infrastructure spend to support new facility expansions and restarts. This represents a small portion of what we view as addressable opportunity in the industrial space.

In our concrete segment, we continue to expect solid long term demand driven by population group growth throughout our markets. We continue to believe in the strength of our concrete markets as evidenced by our bid volume in 2019, when we saw it almost 30% increase in our bid volume over the prior year.

Demand for structural work remains strong as shown by several contracts. We were awarded in the fourth quarter totaling $20 million expansion of our structural business remains a key part of our strategy in this segment.

We can see we expect to see light commercial opportunity being driven by multifamily warehouse and educational projects in our various markets.

Across our operations, we are great increasingly focused on pursuing select larger and longer duration projects in the aforementioned and other markets, which we believe will improve visibility and consistency in our performance.

2019, we bid on $4.2 billion of work an increase of 33% over the prior year.

Our overall when right and 29 team was 20% with a with a win rate in the marine segment up 30% and a win rate and the copied segment of 15%.

Currently we have over 1 billion worth of total bids outstanding of which 289 million is related to the Marine segment and 758 billion is related to the concrete segment.

Overall, we are tracking over 9 billion of current and future bid opportunities.

It's a combination of our current backlog or low bid. The 1 billion of bids outstanding the 9 billion of opportunities. We are tracking we see significant growth potential for business.

We're confident in our ability to win work and efficiently execute all that work, which we expect to drive bottom line performance.

So that leads me to I.S.G. update.

During the second half of 2019, the changes we implemented draw I asked you initiative began to bear fruit across all areas of focus, which where labor management equipment management project execution and corporate processes.

In each of these areas, we've implemented enhancements and improvements to the collection and accessibility of data and timeliness of <unk> reporting to provide better visibility leading to improved efficiencies and cost control.

Our main focus of our honesty initiative has been providing more transparency any information provided to our managers to drive better decisions and improve execution.

As stated before the end goal of our honesty is highest you initiative has been to provide the pathway took a formats that meets our expectations for our business segments on a consistent basis and that aligns with our strategic plan.

We are pleased with that we've made significant progress with this multifaceted program, yielding improved results in the second half of 29 team.

We have completed embedding the processes for Lifesci initiative.

Through our areas of focus we are now moving onto the next steps of our process improvement program.

Our next steps will be centered on driving efficiency driving enhanced sufficiency in labor management equipment management project execution and corporate processes, along with business development estimating project execution planning and project controls.

As part of this drive for enhanced efficiency, we will be implementing a new ERP platform.

Our implementation of a new ERP platform will solidify our operational efficiency and allow for us to scale. These efficiencies as we grow in the future.

Historically, our information systems have evolved as we've grown organically and made acquisitions and we currently operate separate dated platforms in both our segments.

We are now embarking on a project you achieve full systems integration across all our businesses.

And critical functions, including CRM project management, HR payroll and financial among others.

When fully implemented we expect this new platform to significantly enhance our efficiency at both the project and corporate levels.

With that I'll turn the call back to the operator for the Q and a portion of the call.

Thank you we will now be taking questions from sell side analysts if you'd like to ask a question you May press star one on your telephone keypad.

Confirmation tonal indicate your line is any question Q.

You May press Star too if you would like to remove your question from the Q.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star tea.

Our first question comes from the line of Alex Rygiel with FBR and company. Please proceed with your question.

Good morning, guys nice quarter.

Thanks, Alex.

A couple of questions.

First a year low bidder on 154 million, that's a big number any I first congratulations, but secondly, any additional details here as to kind of what types of projects, which segments. So on and so forth.

It's combination both segments 'em, we should have some announcements coming out or you know starting as early as next week.

So you know they are mid to kind of mid sized projects, mostly in that number and but kind of spread between the segments and the end up sectors.

[noise] helpful. And then as you think about your total backlog announced.

Can you characterize the.

Margin profile of that backlog versus maybe what we've seen come through your piano on the last 12 months.

And then comment on.

Sort of the absolute dollar of [laughter].

Dredging backlog that you might have.

Well, Yeah first I would say is in terms of the though the margin profile you know we're pleased.

With what we're seeing on the marine side in terms of that margin profile or you know were where we're working to as always outperformed what we sort of see is our as bid them you know our contingency and work through that to where we can you know outperform a basic all in both segments is water bring in all parts.

Correct.

<unk> at or above our as bid margin.

Concrete, we've got a little bit Ah Ah more of a competitive advantage a competitive pressures are kinda generally speaking, although we've been able to you know in certain areas oh improve on or on our as bid margins. There. So you know if we.

Look at it kind of our performance out of the Marine side, Yeah, We're we're getting into the zone or sort of our other dop margin expectations and we've we've we've seen <unk> big improvement out of the concrete side.

We've got more work to do on the concrete side, we're performing well and some of our markets in other markets. We've got a little bit more work to do and we're focused on a change management and an equipment rationalization further quoting rationalization and that business. Then we expect to be able to drive improvement in an hour or are delivered law.

Surgeons in that business as well.

That's helpful. Thank you very much.

Yep.

Our next question comes from the line of Marco Rodriguez with Stonegate Capital Partners. Please proceed with your question.

Good morning, guys. Thank you for taking my questions right up well, Hey, I was wondering if maybe you could talk little bit about the gross margin in the quarter.

Sequentially had a little bit of a decline roughly the same revenues when I look at them Q3, Q4, if you're gonna be talk little about the drivers that you saw in their tech kinda.

Moved around a little bit.

Sure I'll take this [laughter] yeah, what it was really driven by is we had about $10.5 million of uninstalled materials. So related to six so cyclicality or where it says that when you have a understand materials you booked revenue recall that zero margin. So you haven't install so you take that.

And a just that that's in 25 million out you would see your margins look a little closer to what they were in Q3.

There was really a a timing from some somewhat larger projects and are bringing some of the <unk> the materials onto sorry.

Got any sort of expectation I'm, assuming that from an accounting standpoint, as you catch that a if that comes back to you guys. A in the latter part of the project completion, Yeah. Yeah were recognized that margin as we placed goes up we definitely installed those materials on on the job.

Got it Okay and then maybe if you can also talk little bit about you know your prepared remarks, you talking about a very robust bid market.

And and pipeline of projects that you guys, you're looking to pursue if you could just talk a little bit about provide some more color on on those types of opportunities that you're looking at if you can kind of parse them between the marine and the concrete that'd be helpful.

Yeah, well in both segments, Yeah, we're seeing activity that we we'd like to see we in the marine sector, where segment. We're seeing a you know a work from the government agencies or you know Robert noted the they're kinda tilt towards a government sector revenues, that's really been driven by a couple of a large projects that we have.

From a local port authorities are there were executing on now, but we're seeing we're continuing to see those opportunities we're seeing a lot of opportunities in the Caribbean related around <unk>.

The remarks, I made a with the increase the volume of cruise ships, the new new cruise ships similar yeah. We've talked about this for for quite some time. So we're seeing those opportunities I'm in the energy space. A you know we continue to see opportunities driven by or just the you know the domestic energy production. That's a then.

And deliver to the Gulf coast of refineries and stores facilities and in some cases export facilities. So that's driving continued to drive opportunities for us.

We've seen a a we've seen an increase then ER or opportunities that but those projects to drive for ER or dredging fleet. So we're getting a coverage with our dredging fleet both in the private sector and the public sector, which we hope to see that continue.

And ER. So we're seeing a lot of different things that are that we like there and including you know medium sized project and and some larger projects that we talked about pursuing you know select a larger projects.

The concrete side are we continue to see a a course the normal sort of like commercial type projects that we we target and those because those are kind of small to medium size generally speaking or projects that we're also seeing a it because we're targeting a structural work.

We've been very pleased with the structural projects to that a that we're seeing and we're tracking and we're bidding on a we announced the project last year for structural project. It often that is now kicked off I'm. So we're starting to see that.

ER our efforts in structural go beyond just the Houston market and as I said in my remarks. This is an area of Ah that we've targeted for expansion. So we're we're pleased with what we're saying there and again starting to see that it or other market started starting to see that pay off of our efforts in other markets. Besides just Houston for.

Structural work.

Understood. Thank you and last question if I might you guys recently announced a in industrial market. When I'm you know, it's it's been a strategic initiatives that you guys is and working on here for a few years now I was wondering if you could just talk a little bit about maybe what you learned over this period of time once you kind of took away from any.

Either when and what changes if any to your approach you're you're sort of looking at are implementing to to get this to be a a larger revenue driver and something that might be more consistent or larger piece for you guys, but well we've done a we've done a lot of Ah groundwork in and ER legwork sowing the seeds.

Needs for our efforts in industrial over the last couple of years.

We're starting to see some of that pay off which were with which we are or a very happy about you. We continue a lot of the work that we're targeting a is we've talked about a in my remarks. We're you know a <unk> from existing customer base. So we've got a lot of work there too, but as I say lay the groundwork.

We are tracking numerous projects that both have they all have both a.

A marine component to it as well as a a kind of an industrial component to it. So we're hopeful that we'll see as those opportunities progress that we'll see Oh, we'll see a that pay off for us in terms of backlog in both the for marine work in industrial work. So you know we've just the I guess.

A key takeaway we've done a from this is just being persistent.

We're persistent in our pursuit of this you know getting on the bid lists the getting a the opportunities for us to two bid on this work and then when we were we haven't been successful using that as a you know learning a learning or feedback loop to Ah Ah inform us better on the next per se. So again a lot of things.

That we see going on that that impact the marine market will also impact the the industrial space for us as well. So we're working against the momentum on that a in 2020 as we see some of these projects come to fruition.

Got it. Thanks, a lot guys. Appreciate your time you bet. Thank you.

Our next question comes from the line of Pro fraught with Noble capital markets. Please proceed with your question.

Great. Thanks.

Good morning, Mark Good morning, Robert.

I was just wondering if you could not unlike you know whether that low bids outstanding not get awarded of 154 million is that exclusive of the awards that you've already announced this year or are those awards part of that number.

It's a combination of both up with them, but the majority of the awards Bucked Industrial Award is included in there as well. So it's it's a mix, but the majority of the awards that we've announced this year or part of the local number subsequent award number.

Okay, Great and then Robert could you highlight on your backlog you know what portion of the backlog or do you expect to recognize over the next year or so we're just give us an idea of the age clean up the backlog.

Yeah, we normally we don't give up the specifics, but are we do think that a a good chunk of it will burn off this though you're now we do have a a couple of larger projects.

You know the portfolio project multiyear project that sizable in <unk> and the in the backlog or the Port Everglades project that we announced though are you know several quarters back well it should should substantially wrap up this year. So when we think about you know our guidance then and what we've laid out.

Are we still have some that some work to go get some go gets it to capture or what we do have a significant portion of that and hand now yeah. I was just add to that just to underscore what Robert said, Yeah. We were we liked where we work coming into the year for as far as what our backlog was relative to our guidance and.

We've been pleased with the low bid to the they'll get as Robert said, I'm, So where we like where we're tracking still have more work to do but you know, we like where we're positioned right now.

Okay and the industry Awards Mark is gonna be it's part of marine you're not going to break out the industrial segment at this point in time not at this point or hopefully that'll be that'll be a good problem to have if we get to the point, where we need to break that out but at this point or it's not a size to the that we'll we'll split that out so we'll continue to.

Worked out under the marine segment for that.

Okay, Great and then when you look at the.

When you look at.

Sort of.

When you know where you are in the ice tea process, where if you how far along do you think you are in the process there as far as realizing.

The benefits of their program and then also if you can give me an idea the timing in cost of the ERP implementation and also in the context of what potentially you're going to see Capex for 2000 2020.

Well I.

I think in terms of I.S.G., a world, where we as I said in my remarks, you know, we that without a doubt that embedded those processes a the that we worked on over the past year, we kind of view. This now is we're telling to the end of sort of the the I.S.G. sped. We bought yeah, we'll have some a little bit of.

And ER for Q1, but really we're viewing this now as.

You know this phase is kind of telling to to closure. We were we haven't you know embedded the you know the processes that we developed an ass I'll say not developed for that adds to improve.

Throughout this last year in a in our processes. I think you know were were as we commented on it or we've seen improvement in the back half of the year from those efforts.

We obviously are going to continue on in those areas that we bought with that we've developed but in terms of biased Gi and the expenditure. There you know we should see that expenditure on call out kinda complete in Q1, as we said, though we're now moving into the next phase, which is driven around continuing to it has.

Some things that really kind of anchored around ERP.

You know as I said in my remarks, Yeah, we've got a sort of a antiquated or if you will systems and we've got different systems and in both businesses and so I think there's a lot of efficiencies we can gain by going to Thailand platform and then goal of it really is to get better fab.

The information in the hands of our project managers are our operational managers to to drive their decisions and so that's kind of the that's the next phase. It will go in a way we will talk a we're still in the process of Ah finalizing.

Cost in the negotiations and things like that with that with that effort I'm. So it's pretty mature for us to talk about the up or the cost there, but we will have more for lifestyle that as we are as we move ahead and we'll we'll share that at the appropriate time, one way, we get that'll do it further baked.

Great and then if if Robert if you could talk about 2000 2020, Capex and then also maybe in the context and what do you think working capitals Gonna do in 2000 2020, you know you had a big positive in 18.

Pretty draw a use of working capital in 2019, and then sort or what should we expect in 2020.

Yeah, I I don't expect outside of no and Mark mentioned, though about the ERP and we'll update on that but I I expect Capex do you kind of even though the normal range. There we've seen over the last few years, well you know that seem to $20 million range on a on a gross capex then.

So you know a as far as working capital. There you saw you know this year were receivables increased and it starts or to alleviate itself a little bit and in Q4 awkward income.

Cash from operations with positive so we'll see that cash flow continue to trickle in Q1, Q2, or you know because you're well, but you know we forgot regarding that same range, but we can seem to smoke is you know as we generate free cash flows are due to pay down debt.

And you know as as as we progress for and to your you'll see the continue to de lever or from from both in both the increase in the drilling for EBITDA and then you know just so the total debt outstanding drop there as well.

Great and then it could just faster the last one on on your guidance for you know for EBITDA on 2020.

Wood.

Now how much of concrete you know P to break that out between marine in concrete it sounds like you habit.

Just a rough idea and you know you made a monitor progress concrete profitability continues to lag and can you outline a little more definitively the actions you're taking to improve profitability there.

Well I think a you know is as I said earlier, where you know a little bit further along in marine in terms of being in the zone that we where we want to be a with in terms of Ah you know EBITDA margins and and ER and this it you know so our our guidance on it you know as is.

Primarily driven by the marine sector. However on the concrete side. We've made significant progress there are in terms of a what we've done with our process is how we're set up.

So we're very pleased.

With what we've done there. We're we're pleased with you know the efforts of our team in that in that division.

You know we do we have great people that do great work in that division, we are working though to oh to improve the bottom line and get to get into the zone of where we want to be there in terms of performance and as I said, you know were heavily focused on on a improvement thing and enhancing kind of.

Our change management efforts there. So that you know when were when we're doing additional work, we're getting paid for that a one way or another in terms of Ah Ah Duff doing that additional work that where you know, we're we're really zeroing in on on a or contracts and you know and treating our.

Customers right, but also being treated right as well in terms of that change management equipment rationalization continues to be an area of focus force in both segments. But also you know it's a it's a big effort for us in the.

Concrete division and again, just getting that transparency of information so our managers or you don't make the decisions that they know how to make and is and see improvement. There and then also you know just with other costs rationalizations and so you know our performance on the jobs has improved significantly or.

In the last year, and we're very pleased about that and so we'll continue to focus our efforts around that but also around.

Sort of the indirects that overhead cost structure as well and again, that's about getting information in the hands of our managers. So they can make the decisions that they say they know they need to make it will make or they just got to have to get information. There. So we'll continue our efforts on improving in enhancing a that data that they see to do that.

Great.

Sure.

So if you're not going to break out the marine versus the concrete profitability.

EBITDA in the guidance can you give me an idea whether you its.

Based on getting concrete profitability rebid tie into the zone or is that going to be a 2021 event.

Well, we certainly hope to outperform and obviously, we will work there's always the outperform or you know what we're guiding to but Oh, yeah. I think to answer your question right now our plan for 2020, which we again I hope to outperform on is to make progress towards getting up getting where we think we should be oh, we do.

Plan to have a you know in our planet is reflects that progress.

I mean, clearly we'll work to try to outperform that'd be a very nice for us to two to outperform in that division and get us back in that zone, but I think this year or you know or a base plan is to make progress towards that and <unk>, which would be improvement significant improvement for the division. So that's our goal is of course.

We'll works out before last.

Great very helpful. Thank you so much you got.

No no further questions any Q. This does conclude our question and answer session.

This does conclude our call. Thank you all for joining US today, we look forward to hearing from you during our next quarter.

You may disconnect your lines at this time.

Thank you for your participation and have a wonderful day.