Q1 2020 Earnings Call
Thank you for standing by this is the conference operator welcome to the Moly Group Limited first quarter earnings conference call and webcast.
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I would now like turn the conference over to Murray came Olin Chairman executive.
Chief Executive Officer, and President. Please go ahead.
Welcome to smaller groups quarterly conference call. It today, we'll watch dress three main topics.
First place the fan and I will provide comments and discuss our financial and operating performance for the quarter.
Ending March 31 2020.
And this is the first period that our results are reported in three new operating segments.
It's a structure that we believe provides shareholders what better clarity into our overall business.
Secondly, I will provide an overview of how them all and group is responded to the outbreak.
Of cope at night team, including any potential impact on our shareholders.
And thirdly, I'll provide a best guess look into what the next few months might look like and this will be followed by a few nay Sasha.
So before I commenced today's review I will remind everyone that our presentation contains forward looking statements that are based upon current expectations.
And are subject to a number of uncertainties and risks and actual results may differ materially further information identifying the risks uncertainties and assumption can be found in the disclosure documents, what's your filed on SEDAR and www Dot Mullen hype and group Dot com.
So with me this morning, I have to defend Clark who is our CFO.
Richard Maloney, our senior VP, Joanna Scott Corporate Secretary VP of corporate services and Carson Urlocker is our corporate controller, they're all practicing the article social distancing.
But they are on the line in available as required.
So before I turn the call over to sit fan.
To talk about.
Q1 2020.
Let me open with some color. Some opening comments are clearly we're in the midst of some south challenging times.
Now what from my perspective, what started out as a health crisis.
Cool bit 19 has no morphed into an economic crisis with the potential to cause significant damage to the financial system.
For this reason I am a full on cheerleader of our government officials, hoping that they might make the rate policy decisions. So that the damage to our citizens the health care system, our economy and the financial system can be mitigated.
I don't always agree with their approach that they have embarked upon but I sure in the age are hoping they are right.
Now with this is a backdrop I believe me we'd be in the or we may be in the early innings up some dramatic shifts in the economy.
As such I will state just for the record.
The outlook I shared on February 13, 2020 will not be achieved.
The 2020 business plan and expectations have been totally alterative.
Oh altered sorry, due to the outbreak of called that 19 here in North America, but in saying this let me just reiterate that everything was progressing just fine in our business until about the middle of March.
As you can see firmer Q1 results our business, so pretty robust all things considered LTL.
Remain steady and would've been even better except for some challenges that our grimshaw trucking business unit, which is associated with some enter a risk resupply projects in the northwest territories and some onetime labor costs.
LTL was one of those businesses that has been declared an essential service and it's pretty simple the to explain why communities and consumers who rely on having the goods they need.
And I'll reinforce need.
Likewise, where we were able to continue servicing our customers.
Volumes remained strong for example, in our logistics and warehousing segment several of our business units, including including our Gleason Group 10 whole transportation and can eat at transport they each held in really well.
And in our specialize in industrial services segment Canadian de watering premade pipeline hauling and even our construction urban Thompson, Manitoba small contractors revenue actually increased.
However, the majority of our business units were negatively impacted by business closures plant shutdowns capital expenditure declines in even inventory shortages. So overall, we came through the quarter unscathed, but clearly very cautious. So stuff then we'll provide a more in depth review of the financial results today.
But let me first take a few minutes to comment on how we handle the changing situation. We saw this early we reacted swiftly in fact, we began formalizing our initial steps on March 2nd and we have been actively engaged in monitoring events. Since then we refer this store Corbett 19 action plan.
We have taken preemptive steps to protect the balance sheet and reduce expenses. We are managing risks as best we can in an environment, where no one knows about the potential counterparty problems, we implemented a series of new safety protocols to protect the health and well being of our employees and our contractors social distancing the new buzzword.
Which really means stay at home actually worked.
Our systems work seamlessly, which is a testament to the investments we've made in technology and the brilliance of our team.
They had as prepared in fact I can I'm proud to say, we have not missed a single beat other than we miss each other.
And lastly, I'm delighted to report that thus far in our organization of over 6000 associates.
No confirmed cases of cobot 19.
So it's the fan I'll turn it over to you to provide some additional commentary on the quarter for us.
Thank you Mary and good morning, Fair fellow shareholders and thank you to all those frontline workers and administrative staff that delivered all these results not only the goods, but delivered the results on time.
Our first quarter interim report contains the details that fully explain our performance as such I will only provide some high level commentary.
This is the first quarter on which we are reporting our results in three segments. The historic imperatives have been provided on page two.
Of our Mdna and you'll see the revenue in OBIDA broken down by these new segments in the first quarter revenue was basically flat at 318.2 million as compared to 319.6 million in 2019.
Each of the three segments were basically flat however, how they got there was different the LTL segment revenue grew by 3.8 million as it is largely focused on the needs economy up the consumer specifically revenue improved due to acquisitions of Argus and into urban which contributed $6 million of incremental new revenue.
And strong revenue growth by guard wine.
Being partially offset by softness in the Alberta, govern Alberta market that affected grimshaw, but also to a lesser degree highway night.
It just takes some warehousing declined by 5.5 million as Cobot 19, unplanned shutdowns in March as well as rail blockades earlier in the quarter negatively affected demand. This was somewhat mitigated by strong performance by Klasen.
Including salt sales and intermodal demand, especially as an industrial segment grew by 1.6 million, but that number mask the underlying weakness no dare say I daresay disaster that occurred in March when oil prices dropped dramatically.
Pipeline work added roughly $14 million of revenue construction work at smoke added a further $3.7 million and Canadian dewatering added 2.2 million nice gains, but they were offset by weakness in our fluid hauling businesses and our drilling related businesses that experience more than your typical spring break up declines in fact.
This was the quickest I've seen the oil patch shut down production and stopped drilling I guess the industry has lots of experience now.
As for profitability operating income before depreciation and amortization, commonly referred to as EBITDA was 45.2 million again, basically flat compared to 44 million in 2019. This was despite some well known challenges such as the little thing called Cobot 19.
Really I Testament to our diversification strategy, focusing on consumer needs and LTL, rather than the oil patch on a segment basis. The LTL segment EBITDA was down 1.9 million.
And.
In 2019 guard one had a 900000.
Back pay related back pay.
Billing related to a volume commitment in 2018 payments of this nature and never certain so we took the prudent approach of only recognizing the take or pay revenue. When we received it this resulted in revenue without corresponding costs.
And consequently margin distortion in 2019 and 2020, we expect some onetime costs at Grimshaw trucking.
Comparing segment merch margin on an apples to apples basis margin was basically flat at 12.5% in 2020 versus 13.1% in 2019.
EBITDA, the logistics and warehousing segment improved by 1.8 million operating margin increased by 2.6% just 17% as compared to 14.4% in 2019, primarily due to the strong performance by the Klasen group that and the beneficial effect of a weaker Canadian dollar and lower diesel prices.
There is a benefit to lower oil prices after all.
EBITDA in the specialize in industrial services segment improved by $1 million operating margin increased to 15.6% as compared to 14.9% to 2019. The margin gain was due to change in revenue mix associated with large diameter pipeline projects that had a beneficial effect our margin being largely.
Offset by a significant declines in margin generated by our drilling related and food offering businesses.
Lastly, a quick word on the balance sheet in times like this the past performance is almost irrelevant. If you can't survive this storm.
For us we've got a strong balance sheet net cash from operating activities was up $16 million to 40.2 million in the first quarter. This is the highest first quarter amount since 2015.
We have approximately $85 million and cash in addition to our cash we have an unused to $150 million line of credit and substantial positive working capital. Our total net debt to operating cash flow covenant under a private placement agreement, which gives us the benefit of our in the money currency hedges was 2.29 to one.
Paul what you'd like but I call. It survivability, so with that Murray I'll pass conference back to you.
Thanks step.
Now for my final comments folks before I open it to the Q and eight.
I would just leave the with this as you know I thought long and hard about what to say to you. This morning, but in all honesty, I really cannot provide any meaningful color or guidance as to what the short term looks like.
These are uncharted waters for all of us, but what I can say is this will.
We're still going to have some business.
How much I'm not sure of and I've spoke about it you rich defend talk about it and it's what I talk.
Extensively with the team about here, it's what I call the needs economy.
Which I believe we'll continue to support and drive this economy until the government determines that the watch part of our economy can be opened up.
Now obviously these are early days, so I don't want to even guess at how our business will or can perform over the next few months. What I can tell you is that today, we've issued some temporary layoff notices to approximately 100000 of our associates and I expect more in the weeks to follow unless.
From an start opening up the economy.
So clearly we have not shutdown totally we still employ some 5000.
I can also tell you freight is still moving but and I will reiterate but it's competitive and I am concerned about the counterparty risk. So don't be surprised if I. If we accept less revenue in the short term until we have a clearer picture about which companies can pay their bills. The.
Last thing, we're going to do as go to work.
In a competitive environment and then take all the credit risk thats not going to happen. So.
I think we will maybe just.
I will just high for a little bit on that issue.
In summary, I am looking at the World as follows I think in the short term lets call, but the next two or three months I've really expect business to be challenging.
We're going to have business, but it's going to be challenging in the medium term.
As the economy starts to return and demand starts to recover we'll we'll all adapt to the new realities of the health aspects related to cobot 19.
And what portions of the economy the government opens up.
As demand increases clearly, we'll be bringing back our furloughed people back to work.
And on this issue.
The government support to the economy.
Lets just say this they provided a lot of money into the system and it's going to go to work somewhere some time.
So I believe that once we get told it's okay businesses factories demand.
You can get back doing what we're we're good at so how much how fast let's reserve judgment on this for a little bit and lastly in the long term.
And by this I mean 2021, we will be prepared.
We're still going to be around and we will be ahead of our competition, we will capitalize on the markets and who knows we might even be bigger.
So with those.
Comments in which I said talk for a few minutes is really about nothing it didnt give you any guidance, let's open it up to the Q and a session will answer the questions as west weekend for you.
Thank you.
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Our first question comes from Walter Spracklin of RBC capital markets. Please go ahead.
Thanks very much.
Hi, everyone hope you're keeping well.
Thank you Walt and the same to you and everybody it.
Harvey.
Yeah, No interesting times, so what I guess on that note.
Yeah, I think the world is changing I think the normal that we could go back to will be different it'll be a new normal and and there'll be a lot of fundamental changes.
In the transportation side of things, both Canada and worldwide and I'm I'm wondering.
On that note what do you see is the most substantive.
Change.
Post cobot 19.
That will be impacting directly your business, both you know across across all your reporting segments.
Well.
No we spend time thinking about that and I would tell you we're spending more time thinking about now because I would tell you since late February and through most of March.
I was concerned all about what's our plan once our cobot 19 plan.
And as I reiterated we started very early.
And it's all outlined on our website everybody can see every report that we that I give every update every week as to what steps, we're taking so theres a whole chronological event there.
I'm now starting to move beyond.
The plan to Okay. What's next and what is it going to look like I don't think any of us know for sure Walter but I think you hit the hit at a good point here, it's going to change now.
His society going to change what what our needs are my view is no. We're still doing it now if you look on the highways trucks are still moving up and down the road because we still have to get that you know that.
What people needing communities need.
Everyday so there's still a going to be a base level of business.
No what's the consumer gets going again, how much of the wants part of society and does that lead to actual.
I'm buying things or doing things I don't know that yet.
But I would suspect it will be higher than today, because once people get.
Get out and about we're going to start we'll see a shift in the demand for the wants part of society. I don't think needs are going to go up we were meeting maximum needs now I mean, the grocery stores are busy.
LTL is reasonably strong step we've talked about that it really didn't deteriorate in the first quarter in idle it'll be down a little bit right now because we're not hall as many issues and.
Things of that but.
Still the once the needs part of the economy still going to continue on.
And let's be honest I mean, when we look at the unemployment levels.
You know.
Not everybody's laid off yes, we're going to have two and a half million people in Canada laid off but that's not a 100% of the workforce.
And clearly everybody is nearly everybody's going to have money because the government just given everybody money. So I think that part is going to me. Okay. It's when we can get those factories open up what we can get you know general economic activity going that'll start to see.
Some some real industrial demand going again I'll be looking forward to that in June the trucking itself. I don't think is going to change I think people still up to have their stuff. So.
Theres lots of other parts of the economy that are going to change a hell of lot more than ours. If you want most opinion.
I think I would add Murray that I think there's going to be some stickiness or permanency. We saw an 11 cents decline to the Canadian dollar relative to U.S. dollar here in one month pretty unprecedented but I don't know what we'll get it back rapidly so that I mean, some inflation for for us, especially on repairs and maintenance, maybe some capital goods, but hopeful.
During the end it makes us more competitive as far as pricing for our trucking services and also nationally for maybe manufacturing and other goods, but I see some stickiness to that dollar I don't see it going back to 80 cents quickly.
It's interesting because I I asked that question to the three railroads that have reported so far.
And all of them kind of indicated near shoring as a.
As a need like as a common theme through all of them.
In the near shoring environment, how does the trucking industry change and how does molen how does mullen.
React to it environment and take take advantage of if thats. The if that's the opportunity.
Have a significant near shoring Trent.
Well I think it's pretty well known that typically manufacturing from a trucking point of view is more intensive sometimes seven touch points, whereas if you're just importing something from China or wherever you've got a touch point at the port touch point it too to get it to the wholesaler and then to the retailer final market. So a lot less truck touch points.
So I think it could be beneficial to the transportation sector.
And we'll have to see where lies is all go to the U.S. or does it get distributed between the three North American partners on trade.
I think you were asking.
Hey, a deep question about how's the supply chain going to change and.
That is going to have to be a part of public policy will alter its going to have to be a part of a.
How north America weather markets become more regional rather than global.
I think were early on and in that discussion.
The short term I don't think much changes I think over the long term I think theirs.
And I'm just.
Giving my opinion, so I don't know, but I wouldn't be surprised that the supply chain doesn't become more more localized.
What it is right now.
But.
Our view is that we'll take a look at that the it.
We still have to deliver the final goods you have to deliver to the consumer you have to live delivered because it has to be it's all based on consumption. So.
I think.
I think rails are going to clearly be an important part of the supply chain, particularly on getting bulk commodities moved and.
Intermodal and those kind of things, but in trucking rail doesn't deliver to the final mile. That's all about trucking.
My last questions on M&A Murray with with what's going on here now does this really.
In any way alter fundamentally the target companies that you'll be zeroing in on either as a result of disruption or as a.
As an end goal as to how you want your company to look like five years from no no no Walker it hasn't changed what has changed as I.
As a part of our Cobot 19 plan I said, you know what I'd, rather have the strength of the balance sheet and then do an acquisition. So we put our acquisition strategy at all for bit.
But that's just just to let this thing play itself out for a little bit but.
We have our defined strategy as to how we're going to grow this business and what the areas we're interested in.
Growing in the LTL sector part of the economy.
Is our number one priority and also in the trucking logistics or in the logistics and warehousing business anything you can do where we can provide a localized business.
We're going to be actively looking at that side those are two primary.
Focuses along the way we're going to find nice little gems that we would put in our specialized industrial services side because of.
Those are jams, but our primary as a LTL and delivering to the consumer.
Okay. Appreciate the time Stacey thank you.
Our next question comes from Aaron Mcneil of TD Securities. Please go ahead.
Hi, Good morning, all I'd I'd Echo Walters comments and hope that you in your family's there.
Healthy and otherwise doing well.
Ben Thanks, as well for adding the past five quarters of segment and so it makes.
Putting a new model together much easier.
In the new disclosures it looks like the logistics and warehousing segment is generally pretty steady overtime.
Understanding your comments about counterparty risk and headed competitiveness, perhaps you could give us and sense of how this segments has performed.
In late March and maybe early April and what that might mean for the next few months.
Yes.
The part that really started we're starting to see some some supply chain bottlenecks right now on the logistics and warehousing side. So for example.
A lot of manufacturing facilities have been shut down.
Not deemed to be essential.
Let's just use for example, the auto sector they shut down.
And.
The chart manufacturing facilities, and then those kind of thing so lot of factories closed down which use a high component of logistics and transportation.
Recently, what we're starting to see as those businesses. It stayed open.
Could have had an outbreak in their facilities and.
Let's look at some of the.
Processing food processing facilities, and some warehouses and those kind of things. So we see disruptions to the supply chain that could be localized those are not permanent but you got to slow down you got to make sure everybody safety you got to.
Clean the place.
A bunch of defense safety protocols to make sure that.
The integrity of your businesses, there, but that's slowing productivity down in his is causing some bottlenecks in the supply chain.
The supply chain.
Works under one thesis in the old way it was called just in time.
That's exactly what if everything we've been doing for I don't know how many years.
And they're all works good until.
Things like this happen and then there's only so much inventory because we're relying on just in time, so it looks choppy it looks uneven.
And it's it's at risk right now, particularly.
If you go to large.
Well thing, let's go to large facilities. So if you have a large plant you have a large.
Food processing plant, it's all good to get low variable costs.
You get this and that but when things when if it goes down then everything goes down so we're seeing some.
Disruptions in the supply chain.
The first disruption I'll, just backup a little bit the first disruption was coming out of China in which we bring a lot of goods in and then it goes to all of us as consumers well they got disruptive because can produce anything as a shut their economy down.
They are now starting to ramp up but then you have the demand crushed in North America. So the supply chain is still screwed up.
And so I would expect that.
Until we get the economy going again in North America, and then get a few.
They are two underneath our belt and get this rectified I think it's going to be choppy and.
We're seeing that right now April it doesn't mean it has stopped but it's very choppy.
Okay.
That's very helpful.
Staying with the logistics and warehousing the segment had very strong margins in Q4 of last year and I was wondering.
Can you help us understand what might have driven that and if it's recurring or a onetime in nature.
It's not one time its.
I've commented on many times we've got.
A one of those our largest business in that segment is the Gleason group.
And they've got a pretty robust business model they have.
They have a lot of industrial salt sales of wants to then that's a big part of their business.
It was a big part and fourth quarter as well for fourth quarter. That's those are seasonal.
They go when there's when there's a municipalities and and Roche needs Salt and.
Those kind of things that's their business models. So.
And then they've got a very strong.
Transload part of their business, which is pretty sticky a lot of the transloads related to the consumer.
And so they're Transload operations has been a has been strong it remains pretty strong.
So.
That's that's the primary reason why.
While we did well there along with.
The rest of our businesses, we ever variable cost structure. So revenue may go down but.
We move costs down.
Hi, proportionately and.
We try and manage the margin here.
Not just chase business.
So let me maybe just to clarify like you would Q4 normally be it.
Seasonally strong.
Quarter for that segment, then just given that the glass so our seasonally low would be first quarter, typically and trucking logistics and its typically tied a little bit to the consumer and a little bit to the industrial sector.
Third quarter is usually the strongest fourth quarter last year was stronger than normal because of salt sales and some of the performance at Klasen.
But not not demonstrably stronger than than in the past its.
I think its party maybe the Resegmentation. That's also maybe we have to get used to that were LTL tends to be a little bit lower margin. Then then.
Then logistics and warehousing.
Japan, you you you alluded to it.
But you've historically talked about the third quarter being the strongest for call. It the legacy trucking and logistics segment, it's clear that that all comes from the LTL side based on the new disclosures and I'm just wondering given the impact of cold. It do you think there will be the same level of seasonality in that segment or just the disrupt.
All the normal seasonal patterns.
Well I once again.
I think what you're in for the short period of time is the needs economy.
So the needs economy tells me that's about what you're going to see for the next little bit typically LTL ramps up in the second and third quarters, because every you've got everybody stockpiling for.
And getting things going in the.
For the seasonal uptick in construction and just just economic activity.
I don't see that happening until the economy opens up so.
I think we're kind of stuck in that second we have in what we see in the first quarter and meet the fourth quarter for another.
And we won't have a seasonal bounce back this year I'd also I don't see that right now.
Okay.
Switching gears than maybe Oh, sorry, sorry, Darren I would I would say that you know when it comes to our salt sales, specifically, a pretty hard to resupply typically would be supply in sort of may June and start stockpiling those those salt piles, but.
This year all the municipalities are closed they're not accepting shipments so thats going to have some disruption eventually though it gets delivered so maybe it might shift to third quarter I don't know, but thats just a small part of our business that doesn't yet and just a feed off of that spend that.
The that part of that business is not going to be structurally impaired because it's just one of the needs part of the economy, but it is seasonal.
Its.
Fourth quarter in first quarter.
When the weather is not well and menu resupply in this in the second and third quarter.
Okay, and then maybe just switching switching gears and and absent the obvious so energy in oilfield services, where are you seeing that greatest counterparty risk.
Well I think that counterparty risk is actually everywhere.
So some companies have been disrupted so much and you it's really difficult to get your hits or heads around this I mean.
We have some seen some businesses go to zero revenue.
How long can may last I don't know.
But we're we're off to be careful today on managing that.
In the energy space, the oil and gas sector.
That's going to be impacted for quite awhile I think.
Okay and.
Last one for me, there's obviously you got to be up a whole bunch of additional costs relating to improving the safety of your operations due to cold and I'm. Just wondering are you able to pass some of these costs through nor customers are not yet not yet not not in this market, but there's no way that we can do that.
We have to make it up but you know we were I will tell you were Ics.
Like every company you become very very efficient when.
What everybody's got their game face on so we've got some additional costs, but we'll get rid of some costs, we got rid of a lot of discretionary spending.
I don't see any way to get any leverage on that right now on the on the pricing side.
Okay.
Thanks, everybody Thats all for me ill turn it over thanks, Eric.
Our next question comes from Great Coleman National Bank Financial Please go ahead.
Hey, guys. Thanks for taking my questions.
That's one of good looking quarter and and a stab at what we're looking at and challenging time I really wanted to start by focusing in by zeroing in on your LTL segment.
Which aarons already touched on a bit but I want to dive into more here, it's about a third of your revenue.
We're hearing and seeing conflicting things on the macro side here and then your comments to lead off.
Were intimating were pointing towards relative strength in that business.
On the macro side for example, we're hearing from Canada post Stephen today that they're getting parcel volumes.
Only experienced in the busiest week, leading up to Christmas, they're getting it on a consistent basis now slot sure sounds pretty good.
On the reverse side one of your major public Canadian competitors pointed to pressures on LTL direct costs being a shrinking every week and it was down 17% the laptop in March and 39% in first half in April. So there are obviously puts and takes.
Our two to ask a question and very clear unambiguous language is your LTL continuing to benefit from the current disruption in the economy or not.
And if it is why do you think that Youre, LTL is benefiting and others, perhaps or not.
Great I can't answer the question for.
Four of Mike for our competitor what I can tell you is.
You know is this is that.
Our LTL business is a really a final mile business, where we delivered directly to all of these communities in fact.
We provide service from Ontario right to.
To Vancouver Island. So we're delivering we were kind of a life blood to about 5000 communities and that's that needs part of the economy.
That I talk about it's I think it's the network and the final mile.
Because as you saw I mean people are still consuming stuff.
We we've definitely lost some part of the of the of the wants part of the economy, but we are seeing where we're picking up.
Market share because some of our we have such a broad network, where some of our smaller competitors just lost volume and then they're just not productive but also be like flying a plane with three passengers.
That's not going to work, but with ours, we have such a large network, we can manage the yield more effectively.
And so.
I mean, we honestly I don't spend a lot of time.
You know.
Saying what are what our competitors, who I worry about what our companies doing and how we watch every cost and how we are leveraging our market position and I think maybe that maybe there the easiest way to put it is we provide that final mile of LTL.
Whereas if you are involved in just.
Moving LTL in bulk well, that's that's a very competitive business.
I appreciate you, taking a stab at it and I.
I certainly want to sit didn't want you to to.
Maybe dissecting your competitors.
Comments necessarily just wanted to point out that they are a little bit different.
But it does sound to me as though your particular exposure in LTL in last mile seems to be benefiting from that area of the economy, rather it is getting that.
But the best way to analyze it I mean, they run a very good company and they're very efficient in many areas. So I think it's just there the segment of the LTL business. The ran whereas ours is really from the little communities back to the big centers.
And.
That's they people still need to be fit and still need to have things in the community.
Got it got it.
Secondly, I wanted to switch over to the specialized industrial segment.
Eric Mirror Aarons comments, thank you for the new segmentation.
But specialize in industrial a largely the old legacy energy services I believe can you help us understand what your exposure. There is in the three big buckets that you talk about you know just in general terms not specific dollars, but Stefan and the disclosure you talk about drilling and completion related work that's one.
Production related work Thats too and then infrastructure related work Thats three.
Very different drivers drilling and completion is going to be down hard. This year production is being shut in so down, but not down hard necessarily but infrastructure still very much being built.
We are seeing pipelines coming in and projects carrying on and Youre dewatering and your large large diameter pipe hauling is benefiting can you give us a rough idea of within.
Slide in industrial are those buckets evenly weighted.
Or is it a certain certain third parties want to half is one only 2% just trying to get appeal of the DNC. The production in the infrastructure related business in and brought census.
Very good I'd first just.
There was a presentation Doug Peterson Co conference last September 19, where you see a pie chart, where you will see those categories broken down. So we broke down LTL, what's now logistics and warehousing, what we called truckload at the time and then specialized fluid.
And production services and such so I don't give you an idea there, but but obviously you're right.
Drilling and drilling related are going to be most impacted what we call fluid or production services has a lot of oil sands plant maintenance and such that's all going to be delayed deferred as much as they can now and.
And the.
Needs. If you want to say, it's going to be we have to get the pipeline built those are clear Protex hundred go ahead.
Smoke is going to continue to be busy and as I said Canadian dewatering, it's not a walked into need when you have to move water you have to move it. So those parts of our business our specialized for lack of a better where it will continue to do well and be a lot less.
Volatile salt.
Burn yet.
Greg I don't have they I mean.
It is going to be difficult and it kind of a normal situation.
You might say that.
I was kind of a third production services, a third kind of the specialized and.
Maybe a third of that other bucket would have been kind of related to drilling et cetera.
Clearly drilling is down I think it's going to be down for.
For quite some time.
However, I don't think it's down forever, because they're going to have to go back drilling for natural gas.
Probably.
Later this fall later this year, so we see some natural gas drilling coming back.
But where where there is some some real.
Real delays going on is in a plant turnarounds.
Where the oil companies has just been they've been forced to save cash.
They are delaying all their maintenance so thats just delayed that will come back but in the short term I think it's a it's delayed and then on the on the fluid hauling in that the two to matters, we don't like the counterparty risk right at the moment so.
I'm going hey.
Others.
I'm, just going to kind of shutter that for a little bit.
What we might use those tankers that we got to store oil I don't know you never know what I'll do around here.
That might be storing some oil and those tankers not all in oil.
Well Marriott, we're certainly looking for storage. So if you got some shaken funds and customers now well enough. We're trying to figure that part of the market out Trust me, we're not sitting here just saying, there's nothing I would tell you I don't like the what I see.
In terms of hall crude oil and then we're not going to work for zero I can tell you right now parked equipment.
And.
And I won't take the risk and we'll just wait until.
Another day happened, so you know, but I'm not going to work and then not get paid that's where I talk about that counterparty risk thats not going to happen around here.
And just lastly from me and then I'll pass it back I understand the inability to offer much longer term guidance regarding the dividend policy given the uncertainty presented by the Coca 19 intact, but in that long term and assuming economic conditions gradually normalize.
Would you look to return to some form of the dividend payments would you consider that to be.
Very high likelihood.
Or do you think this downturn has fundamentally changed the way you Lucky capital allocation and you might look at prioritizing different form capital allocation, whether it's an aggressive share buyback program.
More aggressive organic or acquisitive growth.
And reinvestment over top of the dividend I know you've taken a interesting staffed with a three month temporary help I'm, assuming you'll read is about at the end of those three months.
I mean things normalize what do you think is a more likely outcome is it going back to the pre halt policy or do you is your attitude towards capital allocation changing as normal changes.
You know thats, our I mean, that's a really.
Insightful kind of view at and it's one that we look at here so.
Why did we delay or why did we put a suspension on the on the dividend.
There's a couple of reasons for that.
One was.
I said, what like Weve, none of US know how long cobot 19 will hang around for no nobody knows that and truthfully I don't listen to business analysts I'd take a look at what the doctors are saying because they seem to have more influenced right now than anybody else. So.
Right now nobody nobody can give a clearer.
Cleared by so on that.
So the first step we did say, let's protect the balance sheet. The second part was as I just found it as a CEO very difficult.
To say I'm going to lay up a thousand people, but I'm still going to pay the shareholders.
So I said to shareholders, if I'm going to lay people off.
I think the prudent thing to does do is to take one on the chin.
And then all of the board those senior management a lot of people in our organization. We felt we all have taken a setback also.
So.
In respect for our fellow associates that I had to.
Really give them bad news.
You know I, just felt very awkward doing that.
We took part of that savings from the dividend and we allocated $5 million to our mall and family assistance plant in which we said if our if our associates get into trouble before the government arrives with their health and sometimes.
That doesn't always have arrived one is supposed to we said we're going to have a backstop here for people. So don't worry everything will be okay, and let us focused on getting you back to work as soon as possible, but if you and your family run into trouble, we got you covered.
So I think part of it was related to that I, just didnt feel good about it the second thing was protect the balance sheet.
And the third thing was you know I when I saw.
Issues happening in the market in which we had let me call at this we have forced selling overstock.
Well if people want to sell it.
We'll just keep buying it back.
And so we been aggressive on the share buyback I think we're up but I think we announced what one seven or nearly 2 million shares of amongst they almost 2 million. Although we're doing about 66000 shares it yet so we're doing the Max buyback that weekend, Greg because of the our stock is on sale it yes.
We're work there's no doubt the economy took a took a setback and things are going to slow down for a bit but.
Does that mean, we're going out of business not a chance that's all going to happen but.
We've had a lot of disruption in the market and.
When you when I talk about Counterparties, sometimes I had shareholders are getting more trouble at our company and they were just.
Forced to sell our stock and I said, well, okay well buyer.
So thats, how we looked at it.
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And so we're going to continue to buyback our stock so long as our stock as on sale.
I think Greg longer term, if you think about.
Set your EBITDA wherever you think it's going to land and we've got ideas, but I mean, we don't think that we're going to run into problems with our debt covenants and so when we think about free cash was still gonna have enough to pair interests are still going to pay our taxes were still going to have money for capex until then we'll still have $85 million of cash and what do you do with it but were.
These stupid of us to pay back, 4% or 3.9% debt early incur penalties and everything like that so thats debt repayments are probably off the table. There and then so the other alternatives share buybacks acquisitions dividends and so I think we've always taken up and approach where we're trying to balance all of those but.
Share buybacks being a little bit new to us we've never really done that in any meaningful way in the past but.
It's on sale. So we'll continue to buy back, but there's still going to be opportunities there and so we'll balance that dividend and acquisition, but clearly when we start getting out of this we won't need to sit on $85 million of cash forever, but it's a nice nice to have today I'll tell you because it means more I get to further.
Greg I'm, we're not going to sit on the cash forever. That's that there's no need for us to sit on the cash what I just want to take a look at is what happens in the second quarter. When does the government really start opening up and letting business go back to work and then then we just participate along with the demand.
And that will probably start happening in the third quarter.
And then by 2021, most likely best case scenario is where back.
Maybe.
Well on our way to getting this economy going but if it doesn't then.
So have problems out there so let's let's just look back we distributed roughly $1.3 billion to shareholders over the years I've been in the held in this company I think we'll probably give back money to shareholders.
I appreciate it I was just any color on light, it's time to be prudent on.
On location and this is one of those locations just to be prudent.
Only saw this coming so just you know, we're just being prudent I'll take a look at it.
You know I said, it's temporary and that's what I mean, I said, it's temporary.
Because I don't think the economy is going to stay.
Down forever.
Got it that's it from me thank you very much.
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Our next question comes from Konark Gupta of Scotiabank. Please go ahead.
Thanks, and good money other than morning.
Money modeling.
Just wanted to start off.
On the counterparty risk comments that you made a today.
Have you realize any bad debt expense, so far and do you anticipate any in Q2.
Well, we've upped our provision trying to be cautious we've always.
Theres always some bad debt I would suspect that were coming into unprecedented times I'm sure. The banks are looking at it as well in upping their reserves.
The problem with bad debts as you go into it thinking it's good menu don't know, it's bad until it's bad but.
A lot of our customer base, though our large well capitalized companies, whether it's a foreigner valet or.
Sienna Raul or suncor, so that a lot of our business. We don't have a lot of exposure to any one customer. So we're still very well balanced we still look at it and we we look at it like a hawk and it's not just at the end to the month or six weeks after the quarter end that we're looking at receivables.
Look at it all the time, so let's step we accrue for bad debt.
Correct, and we upped our accrual during the quarter by about a million dollars. Okay. So we've upped the accrual car.
So we think the risk has gone up.
So we've done two things on that we've upped the accrual and then secondly, what we've done is really focused fine tune on.
On looking for any change whatsoever in.
In the payables patterns, but I can tell you.
It happens very very quickly today and new.
We're all going to get used to there is going to be more of that over the next few months in my opinion.
Okay and it makes sense, thanks for that and then.
On the LTL and Alan W. segments.
These are obviously less time, we are seeing goes segment disclosure, so just to kind of pardon my ignorance.
Ignorance on on what's there and what's not what kind of exposure those segments have to deal with the market's individually if you can come into that.
Well I would tell you the LTL, our biggest business unit and LTL is guard line, which is Manitoba base. So.
Think about it the strengths really lied northern Ontario in Manitoba, and the largest business unit in our our logistics and warehousing is klasen again, Manitoba based but they have a more of a western Canadian flavor. So.
Listen we are western Canadian company, Thats, where we really are Ontario west.
We have very deep integration and the LTL market and in the west.
Logistics and warehousing tends to be more of a north American freight a things and theres lots of good companies that are centered in Winnipeg, but because there are central to the North America, but.
It's still there's still a disproportionate.
Piece to Western Canada.
In both those segments and I would look back we would give you the breakdown on revenue for the last couple of years between LTL and in our Mdna between LTL and what we used to call truckload those are basically the segments now.
We've just broken them out for further clarity and we've removed smooth the construction business out of logistics and warehousing, putting the specialized.
Okay. That's helpful. Thanks, so much.
And obviously things have been pretty fluid and then they looked at remains fluid hunting and then and this quarter.
No B.B. I kind of in the third on most almost four FICO vehicle. If you can comment does provide any kind of directional indication as to what you saw in the first three weeks of vehicles that will give us good indication.
In the interplay revenue say well look at.
The clearest indication I got as Weve laid off a thousand people.
Okay. So there is your first indication that business has slowed dramatically.
And most of those have happened since the first of April so.
And I would expect maybe.
At the layoffs to continue through the month through the month of April.
Huh.
So.
That will give you a pretty good hands as two businesses being is being impacted now and I think but I can't give guidance I've said this I don't know where it is I think what we'll do as we'll probably.
Give them a mid quarter update once we get some April and may numbers in.
So kind of early June 2nd week of June, we'll probably give an update as to what we see how the quarters going.
But I can't I just.
I don't know for sure what the quarters going to come in at it.
Yeah, I wanted to kind of guess.
I guess.
We're down 15% on your Labor force, we might be down 20% and then business is tougher so we might be down 25%.
You know off of the first quarter numbers.
For revenue.
Okay, So light industrial being the hardest hit data out of the groups our oil patch.
Right and that's that's kind of.
Thanks.
And.
The margins again same thing like these segments I kind of new to us and as a disclosure so I.
I think you made some comments about margins that season before and this caught up generally for the for the segments, where do you see a bit segment. The Threed you see most Brazilian income so if you own action so by its nature.
And with segment do you see the having more downside risk in margins in this kind of shopko assets revenues decline, while short term the warm what the greatest risk as our specialized because.
We're shutting down a lot of business and just waiting on that side. So that you make no margin on the logistics and warehousing.
We should be able to manage the margin reasonably well because we have a significant portion which is variable expense. So we'll be okay. There and on the LTL side I think margins will hold full Dan because we just manage the manage the yield so.
Revenues might be down, but I think we can manage the cost side.
Reasonably efficiently, we just won't have as.
Have as much revenue.
Amortize some of the fixed cost over but that clearly the biggest margin.
Loss is probably going to be specialized.
And.
Industrial services.
Okay, that's great and lastly from me see made a comment about M&A.
I just wanted to understand how do you think about the right time for M&A and they give you act to quickly you made went into you know GAAP cash reservoir liquidity at rest potentially and if you wait too long you Miss a good opportunities how do you bonus those things.
Well, we had to we have quite a bit.
Line effect of acquisition opportunities, but I put them on old.
When coal bid.
Became a real risk and we saw that in February. So we were we moved very very early to they not just going to wait and see how this works out and I really want to see how the whole thing works out on the Counterparties stuff. So.
But I'm not going to we're not going to sit on the cash forever because.
If there is no need to do that we need cash.
Two.
Yes.
To provide some comfort but.
We're not going to sit on it forever. So.
We're going to continue to our share buyback, which is really a form of acquisition, we're buying back our company stock.
I may be sites.
I'm trying to work through that right now is that.
Depending on how we see the supply chain workout.
We may ramp up.
Our investment in capital like we have not cover our capital expenditures as share I'm not like some companies I'm not cutting capex because.
Number one you caught.
Really concerned about what happens to the price of of the equipment that salt whats all priced in us dollars and Estefan said and everybody knows that Canadian dollar got whacked.
And so you're going to have we're not going to stop buying equipment and effective we may accelerate that I may use part of that to accelerate some of our capex buying.
So we're already starting to see park shortages for our equipment because of close factories down. So have you want to have the right you want to be able to have the equipment to to go to work. So and then of course on M&A, it's dependent upon when the when the timing is right and we've got to say take a look at there.
They're counterparty problems like I got to look at the balance sheet. So we are doing business with are they going to be around.
Who would have thought the airlines would have been done who would have thought all these things two months ago. So.
Sometimes it's best to just pause and take a look around and not stick your data and their pretend you know everything and Thats. What were you got to leave that to US we'll figure it out.
Okay, No that's perfect. Thanks, maybe I'm. Thanks.
Thank you.
Once again, if you have a question. Please press Star then one.
Our next question comes from thank God I see Ibcs. Please go ahead.
Good morning, everyone.
Got it.
So maybe just a kick things off can you share some of the color on the Tailwinds you witnessed although that smoke other spoke in the quarter was that driven by one large project and you do do you expect that to continue into Q2.
So us smoke is their biggest customers valet, but their second biggest customers. The government of Manitoba. So that's road works insights that will continue on it we suspect that that construction activity infrastructure build out governments are cutting those out so as long as are able to work they'll have a good.
At quarter smoke is not one of those business units that is large relative to the rest of the group, but it's one of those little gems that we have that.
Really the only civil construction company and Thompson, So anything Thats getting spent in the north to provide infrastructure for first nations and road infrastructure or infrastructure for the.
Valet mine up there for nickel, which is still a very much needed commodity.
They'll do all right.
It's not a big company and it's not something we're going to scale into but.
Arc, Jeff, Please and who looks after Gleason really overseas this business unit.
Valet is a very very large customer of the cleese in group and we invested in this.
Good to provide a continuity of service.
To valet and they had a strong position in northern Manitoba for government projects US defense as are the only player in town right now so they've got to they've got a nice little book of business and.
You know, we have but it's not scalable but it.
And its construction so it's a bit choppy, but it's it's a nice little Jim as we as we call. It nets tucked into this specialize industrial services business the bigger one.
That is going on in the next bit is the move is the can continuation of pipe hauling and and these big construction pipeline construction projects, primarily let's call that Trans mountain.
That pipe is still moving the government of Canada is still they put us on hold for a little bit, but they are going to build that pipeline.
I think I've always said this they might get it up to hope I don't know if they will get into the Burnaby, but they'll get it to hope.
And then the other big project is the coastal coastal gas project, which is tied to the big LNG, Canada project up a kitimat. So that project is going on there has been a couple delays on pipe coming in because India had to lock down.
Did a hard off down in their economies. So ships are not bringing pipe in right at the moment, but thats that made pushes backed by a quarter.
But those projects are still going on and we expect those projects that one for a little bit.
For the next year so for sure so.
Keystone there will be some some some additional work from the Keystone project. So we expect the pipeline business to continue to be robust this year.
But it but it can be choppy it can be delayed there can be there can be the supply chain issues that arrive and you just got up it's delayed it's not stop this delayed and I hope that Thats a general theme on the overall economy that it's been the being delayed put on hold and then and it starts to open up it's not going to open up on a full.
Gates Edmar opinion, it's going to start opening up one step at a time and then Thats why said by kind of when we look kind of up to 2021, we should have a reasonable book of business will all up and.
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Either with either got this got Dang bug or will learn how to deal with it more effectively a society and we'll get the economy going a little bit. So we just think this as.
We're going to we're going to take it on the Chen for a quarter.
Cautioning every everybody okay. Okay. So it's one quarter, it's not our business, it's one quarter.
And they said okay. That's very helpful. Thank you I guess, maybe just following up on the more oilfield related business unit then in particular, so the more drilling tied to business units. How are you thinking about their operating platform in the context of we've been in America bare market for sometime now and you guys have scaled back platforms.
Yes, the space is due for another move lower is there more areas, where you could see a permanent scaling back or is that largely in the air and any scaling back would be temporary.
What.
We are well we've got we've got a pause for a little bit and see what happens.
Let's just take a look at kind of the drilling side, what is the drilling side well over the past little bit people were drilling for candy for oil.
A lot of economy was used for deal you went to.
Blend with oil sense, well oil sands is either going to be dramatically reduced or shut in so nobody is going to be drilling for drove the value in for a while however.
When you don't drill for the Ewen you may not find gas so you'll see them transition in my opinion some of the companies to gas drilling not to Delia drilling and because you're going to have to have natural gas natural gas is going to be.
A need it's not a what.
When its winter you need to hit the whole.
So.
And then once we get that pipeline built and they get that plant build out of kitimat, that's incremental demand. So we're not getting out of the business, but it's definitely been impacted for a bit.
And we'll just that's probably two quarters not one quarter.
Right. Okay. That's good color. Thank you and then lastly from me when it came to the rail blockades ever witnessed in January can you provide any goalpost surrounding what sort of financial impact those would have had.
That was one of the ones that was a really I supply chain disruption has affected our klasen group most of all but it was both positive and negative. So they came out of it with a stronger March afterwards, so with sort of delayed demand there.
I think it really demonstrated to the country, how reliant we are on supply chains and and such.
Financial impacts I think net net for the quarter. It was probably just a slight negative not a huge negative but there was some some revenue loss there's no doubt.
Okay understood. That's very helpful. Thats all from Neil the other questions have been answered I. Appreciate the color guys and hope everyone can stay safe out there I'll turn the call back I appreciate that take yourself now.
Our next question comes from a life cycle of Industrial Alliance Securities. Please go ahead.
Good morning.
Good morning, a lot less.
Got most of my questions have been been asked.
Thank you maybe different one in terms of restructuring could we expect to see some restructuring charges.
In Q2.
Beyond the 5 million or potentially that's out there.
First of all clarity on the family assistance program 5 million they've been set it aside really to help those that have been with us for tenured employees that have been with us and we expected to bring back.
But there will be some hits in Q2 in Q3 as some of the temporary layoffs become permanent them, we'll have some sir some severance, perhaps but I don't see it is being significant at this point really our plan here is to continue with temporary furloughing employees and hopefully we bring them back and it all.
It depends on the permanency of these shutdowns. We are first told two weeks and now it's two months and and new Nols. So it's it's very difficult to quantify there there will be some charges also in our oilfield services business, where we've seen significant declines for also going to be applying for some of those are wage subsidy program. So hopefully that will buy trust anything that we haven't.
Severance.
Okay, but we've got the risk that on the you know as a.
When you look at things and we talked about that in a goodwill in the financials.
And Thats of occupancy is that when you have a.
Rapid market change like this sets.
Now that you've got to read take a look at your goodwill and those kind of things those are noncash of course, but still.
So you got to take a look at that.
In all goodwill is based upon some future discounted cash flow based what you see going to happen and in the in the future the near term is.
You know and they'll feel side has been virtually wiped out.
But.
Is it white Oak forever right I don't it.
I think the oil sands is a lot of trouble.
But I think we're going to have to go back drilling for natural gas. So it's not going to go to zero.
And those kind of thing so.
It's tough to quantify right now at the moment I'm I'm, hoping that we don't have a lot of.
Counterparty risk and bad debt, but I can not with all honesty and clarity tell people there won't be any.
I would be extremely surprised if there isn't so.
To be blunt.
It's is it.
The the devastation that's happened this and then the swiftness to this has exposed and weakness in our in our economic models that we have in Canada.
And.
And some companies that to.
Some parts of the economy have been wiped out I mean, I'm looking at the airline business what was robust and then it's gone.
So.
We'll come back, yes, probably come back but for the short term it's wiped out so we're seeing that on some.
In some areas. So I think thats. The biggest biggest one for me is just that counterparty risk that keeps me awake at night.
Okay.
Couple of questions related to margin mean, historically Mullen group has done a pretty good job in keeping margins. Despite revenue declines pretty constant and I'm going to focus on EBITDA margin and I'm going to focus on 15% right and wrong, but yes, I mean just use that.
Hi level.
This year, we're going to see revenue declines.
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I my assumption, but maybe you can clarify.
It would probably be impossible to get 15% margin this year.
With that be sort of a fair assessment and do you think you'll come back to those levels longer term or maybe go higher.
I think short term you're right, it's going to be difficult when we lose.
Too much business all wants to maintain margin.
So those so thats, a fair assessment, but longer term the margin will go up.
The margin will go up because we're going to be more efficient coming out we've already found ways to be more efficient than we ever thought about just in the last six weeks, so we're going to be more efficient.
I would be very very surprised.
If we don't strengthen our market position.
During this next part of the cycle as some of our competitors just really run into a lot of trouble.
I would be very very surprised on that.
And so.
And then we'll continue to as we always do try and manage that spread we always spoke medicine manage that so some of margin is dependent upon how much company equipment you have.
Not necessarily what revenue do so if we go with more logistics with no capital requirement you. The it's difficult to make a huge margin on that.
But you do expect 15, plus if you are putting your all company equipment to work for sure.
So I'm going to will play and see how this works out who's going to be able to get access to credit who's going to be able to by that.
By the equipment, we might go to more company trucks I don't know for sure that's going to play out over the next two to three quarters.
Okay.
Now I'm going to take margin to an extremely myopic view and image can't answer that's that's okay.
So when we're looking at incremental loss in revenue versus incremental decline in EBITDA margin I can leave it up to myself. This sort of forecast revenue would it be may be fair to say that for every dollar revenue you lose short term that you would lose you know I'm going to be plant that's the goal.
Poster wide, but it's up to 100% EBITDA I noted that but so I'm going to just pick a number of 50% EBITDA and again. If you can answer you don't I I appreciate it but I'm going to ask the question.
Well I'm glad you asked the question.
However, I can't give you that answer.
But but I might give you an answer at the end of this quarter I think it'll become evident.
Until then Elias I have no different than you are.
I've thrown a dart at a board.
But we will stress test this quarter.
As to where that comes and then we'll all be able to recalibrate at the end of the second quarter.
How we did.
Or how or how will we didnt go didnt do well from that perspective, but longer term.
Hi auto.
We're not going to go backwards longer term I don't see that.
Okay, but in the short term.
It's somewhere between 25 and 50% pets.
Everybody fixed or.
Fix their number and goes from there.
Okay.
Okay. So if I got that right and somewhere between for every dollar loss.
Between 25 cents of EBITDA.
250 cents is what you're stand alone.
Okay. Good good I appreciate that I think the I think thats if any of you. If you do that math, though you would probably still come to conclusion to say, we're still going to pause at EBITDA. So we're not one of those companies that actually has negative.
Yeah, well park, it but that will mark the equipment rather than go backwards, yes, yes. So.
We will manage spread.
And not lose money as best we can't but even what you're saying, we're not going to go backwards to on on EBITDA. So we're still going to generate cash.
Okay.
[noise] not as much as we'd like but these are different times.
In all in a different times you, we all can pick one we think.
Different times is over as I've said.
Everybody I look its.
It comes back when when the virus decides and the government than decides whether it's okay for us to to go back and these are outside of our control until then we manage and we adapt to every situation that comes up and I can just tell you I mean were virtually on the phone everyday managing every situation.
We're doing it all remotely now and as seems to be working pretty damn well.
But everybody on the senior team then.
At our whole company is managing everything on virtually.
On a daily basis, so we adapt them, we adapt quickly to changing market conditions and high expect is going to be a lot more change over the next couple months.
Okay.
I guess I'll say I appreciate what you've sort of a provided for disclosure so far and if possible. We can hold you to late May early June commentary. It it would be appreciated knowing that you have you know what business to run also so I'll leave it at that Yep. Thanks, So just.
On that thanks.
Hi, Thanks to all of you for joining us.
I think we've we've talked about it here, we're going to we're going to give an update to the board we give them financial they get financial reports every month, but we're going to have an update with them in early June once we get the main numbers off and I think what we'll do is we'll give a will have a quick call and give an update to everybody on that or at least will provide some some.
Some of some indication of where we're at.
Quarters go by pretty fast, but things are changing awfully fast today. So.
We've been very vague, but we'll be able to button that up I think by.
Second week of June for sure we give so yeah. So that's our objective and.
So we were pretty good staying on on time, So we'll leave it with that folks. Thank you for joining us and.
And we'll we're going to Weve a lot of our attention by the way today is making sure that we manage the health and safety of our people because we got we still have a lot of people out there working every day and damn they're doing a good job and part of our responsibility here is the senior executives make sure that we're doing.
Everything possible, so that they feel comfortable and safe working in our company and that we got there back. So yes. That's that's the other part of our job and we're going to leave this call and that's we're going to get back to on that side, because we still have a business to run. Thank you very much for joining us on and stay safe.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
Yeah.
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And.
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Okay.
Yeah.
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