Q1 2020 Earnings Call
Please standby your meeting it's about begin.
Good morning today as me first 2020 welcome to the timeline to announce the first quarter 20 to 20 results conference call. Please be advised that this call is being recorded your host for today well be Mr., Mike Mcmillan. Please go ahead Mr. Mcmillan.
Great. Thank you Donna.
Good morning, everyone. Thank you for joining us today to discuss the results of the <unk> industries limited for the first quarter of 2020.
Also on the call. This morning, as Scott met Hurst, President and Chief Executive Officer.
And Paul do you were executive Vice President.
As noted in the press release issued yesterday, we will be referring to a package posted on our website, which we encourage listeners to download and follow along.
Before we continue I would also.
Like to advise listeners that this presentation may contain forward looking statements and information that are subject to certain risks uncertainties assumptions for complete discussion of the factors risks and uncertainties that may lead to actual results weren't Vince deferring materially from those expected.
Please refer to toward much press release, and Mdna from yesterday, which is available on our website.
We assume that you had the opportunity to review our press release and related financial information issued yesterday and as such we will focus on key highlights.
Scott will begin with a few general remarks, and some comments on Earth look after which I will provide some highlights on the financial results then we'll be more than happy to answer questions already you Scott. Thank you, Mike and good morning, everyone.
Before we begin I would ask you move to slide three on the duck.
I'm delighted to officially welcome Michael Mcmillan Executive Vice President Chief Financial Officer to the door Martina.
Michael as an accomplished CFO with more than 25 years of financial experience.
It's actually officially going toward one on March 1st 2020.
It's been an incredible transition given the environment, but true to 12 months philosophy of ensuring orderly transitions, Paul do or executive Vice President remains onboard to assist us in this important changeover.
Paul's had a distinguished career, providing critical stewardship over the past 15 years.
Thank him for his contributions support and partnership.
I'd also like to take this opportunity to acknowledge an important milestone.
This month.
Partner Caterpillar celebrated its 90 fiveth anniversary.
This is a formidable accomplishment and the entire tore my team extends congratulations.
Proud to be caterpillars partner representative central and Eastern Canada.
Turning now to our financial results the first quarter three years, typically softer than others, given seasonality and the impact of winter weather conditions in most segments of our businesses.
This was exacerbated towards the ended the quarter with reductions in activity, most most notably mining construction shutdowns relating to covert 19.
Results were further dampened by higher expense levels compared to revenue growth.
The recent outbreak of Cobot 19 puts us in an unprecedent environment as outlined on slide four.
Four months businesses have to date been declared a central services and all jurisdictions in which we operate.
We're not insulated from the broader economic financial and market impacts.
Actions have been taken their ongoing across our three areas of focus.
Checking our employees.
Serving our customer needs.
And protecting our business for the future.
We appreciate our entire team effort commitment and supporting our customers during these challenging times.
Highlighted on slide five consolidated revenues increased 2% wherever this was dampened by the onset of Cobot 19 in the latter part of the quarter.
Support and rental revenues were trending 5%, 7% higher through February but reduced activity in March largely offset this growth.
Economic and business conditions are fluid.
As such it is difficult to quantify the impact of covert 19 on equipment revenues.
Operating income was 6% lower on reduce gross margins as a result of tight pricing and lower rental fleet utilization combined with increased expenses, mainly due to increasing the allowance for doubtful accounts.
Net earnings decreased 5% quarter versus year ago, well EPS decreased two cents 46 cents per share.
Backlogs 567 million very healthy at March 31st 2020.
We're proud to take part isn't central serous garments businesses sort of critical central services, including but not limited to food production storage and distribution networks power generation, including backup power critical infrastructure transportation and emergency response.
We continue to monitor the situation closely and are implementing responsible measures to manage and protect the long term health of the business.
Including voluntary compensation reductions by the executive team and the board of directors.
The diversity, our geographic landscape and market served extensive product and service offerings and financial strength.
Together with a disciplined operating culture position us well to whether this situation.
Moving to slide six the equipment groups parts and service business provides stability and benefits from a large diversified installed base.
Prior to the outbreak the long term outlook for infrastructure projects and other construction activity was positive across most territories.
The company has a large base mining customers, which in some cases has seen reduced operating activities as a result of coal at 19 implications.
These customers and jurisdictions the operation continued to evaluate appropriate activity levels on a daily and weekly basis.
Longer term mine expansion looks positive but of course depends on global economic and financial conditions.
The company has taken actions to reduce expenses participating governor <unk> government programs, such as works here where available.
Human capital, including or technician workforce is one of our most valuable assets and we'll protect that asset to the extent possible.
In the quarter, we continued move forward with our investment in information technology lining or dealership under one operating system as well as facilitating securing remote access to our networks. This created added expense.
Actions are being balanced between short term adjustments relative to demand also being sensitive to the long term requirements, ensuring the business is positioned well to meet increased client requirements.
Broader product lines investment rental equipment and developing products for technology supporting remote diagnostics and telematics are expected to contribute to the long term growth once economic financial and social environments return to more normalized state.
Tim goes installed base and product support levels are well positioned to support current and future operations and growth trends. The diversity of the market served expanding product support offerings in services strong financial position and disciplined operating culture positioned the company well for continued growth in the long term.
Record recent booking activity and backlogs bode well for future results.
I will now turn the call over to Mike take you through highlights of the financial results Mike.
Thanks Scott.
It's a privilege joined the turn my team and take part in today's discussion I look forward to meeting those on the call that I haven't yet once it's safe to do so.
Lets put a bit more color on the operating results starting with the equipment group on slide seven.
Revenues were up 4% in the quarter.
Total new and used equipment sales were up 5% sales into construction markets.
Were up 10% with good with good growth in Ontario, and Quebec.
Sales into mining markets were down 5% largely related to reduced activities late in the quarter as Scott noted.
Also power system sales were down 7% material handling equipment sales increased 11% will agricultural markets were lower down 13%.
Rental revenues were largely unchanged year over year as revenue softness in March largely offset revenue growth from the early part of the quarter.
Rental revenues from heavy equipment were down 16% power rentals down 11% in material handling rentals were down 4% offset by late equipment rentals, which were up 2%, reflecting good activity and central Canada.
Partly offset by lower activity in Qubec as well.
Rental revenues from equipment on rent with a purchase option or RPL were up 22% on larger and larger fleet over the period.
Products support revenues grew 3% on higher parts and service revenues growth was good in construction and power systems mining was up 1% as early growth was dampened by mine shutdowns in March.
Gross profit margins decreased 100 basis points in the quarter equipment margins were lower on the continued tight pricing environment in concert with lower industry activity levels.
Rental margins were lower on fleet utilization in the under absorption of rental investments made last year product support margins were also lower however, sales mix was neutral year over year.
Selling administration expenses in the quarter included a 4 million gain on the sale of a property while the comparative period last year included a pension curtailment gain of $5 million are they're selling and administrative expenses were higher including allowance for doubtful doubtful accounts, mainly due to the aging of accounts receivable.
And the timing of collections.
Their compensation costs were higher on annual salary increases and higher headcount.
Mark to market adjustments on the fund deferred share units reduced expenses in the first quarter of 2020 information technology related costs were higher in support of our continued system integration work, but the dealership.
Operating income was down 5% on lower margins in the higher expense ratio.
Bookings increased 15% in the quarter as higher construction power systems in material handling orders offset the lower mining in agricultural orders backlogs of 353 million were 11% lower than this time last year across all sectors, except construction.
Currently we expect substantially all of this backlog to be delivered this year.
As you are aware backlogs can significantly can vary significantly from period to period on large project activities, especially in mining and power and the timing of orders and deliveries and availability of equipment from an inventory and suppliers, let's now turn to Simco on slide eight.
Revenues were down 13% in the quarter, mainly due to timing of package sales slightly offset by product support growth.
Package revenues were down 20% with decreases both in Canada and the U.S. package revenues are recorded based on percentage completion and reflect timing of receipt and start of orders as well as project schedules industrial market segments were down both in Canada, and the U.S. offset by higher recreational sales in Canada and the U.S.
Within Ontario, within Canada, Ontario reported strong activity levels, while in other regions they were lower.
Product support revenues increased 1% versus record levels for the first quarter of last year.
You asked was up 6% while revenues in Canada were largely unchanged.
Gross profit margins increased 360 basis points in the quarter versus last year.
The increase in margin results from higher package margins up 170 basis points and higher product support margins up 40 basis points.
Combined with a favorable sales mix of product support revenues total revenues.
Selling and administrative expenses were up 13% in the quarter, principally due to higher allowance for doubtful accounts on timing of collection activity.
Operating income was lower versus last year at 165000.
Largely reflecting the lower package revenues and an increase in allowance for doubtful accounts slightly offset by the margin improvement.
Bookings were up 61% to 112 million.
Several large industrial orders received in Canada, well recreational orders were lower overall bookings in the U.S. were 9% lower but on the smaller base.
Backlogs of 214 million were up 64 million were 43% versus a lot end of March last year.
Industrial backlogs were up 86%.
Offsetting lower Rex relational backlogs down 5%.
We expect approximately 70% of this backlog to be realized as revenue in the year. However, this is subject to construction schedules and potential changes stemming from the cold at 19 pandemic.
On slide 19, I'd like to touch on a few key corporate highlights.
Noncash working capital was 107 million higher at 571 million versus a year ago.
Lower accounts payable, reflecting the timing of receipt in terms of inventory purchases coupled with the gains on foreign currency derivatives used to hedge currency exposure.
At March 31st we maintained our very strong financial position with a cash balance of 388 million in a strong balance sheet.
Subsequent to the quarter, we secured an additional 250 million through as one year syndicated facility to provide additional liquidity in this period of economic uncertainty.
And finally as announced the board of directors yesterday.
Approved the regular quarterly dividend at a rate of 31 cents per share consistent with last quarter. When it was increased by 15%.
That concludes our prepared remarks that this time OVC to take questions.
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First question is from.
Canaccord Genuity.
Hi, good morning, guys.
Good morning.
Right.
Well I'll talk a little bit of both the rental fleet utilization continues to drop a little bit.
Do you think that the you know the uncertain environment, we're in right now.
When when things start to normalize a little bit will lead to perhaps your customers opting more towards rental than than.
Perhaps used or new equipment.
Yeah, that's great question I.
I think you know we saw it in the quarter customers with the covert impact became.
More conservative and understandably.
But he is sort of in the same vote here and when we saw the decrease in the RPL inventory levels.
That's a signal that theres a conservative pro so that was also due to the conversions that took place, but we did have some returns so overall.
We might be positioned very well as customers demand signals start to improve because we certainly invested.
Got it over a year over year basis on the quarter. You know you look at our rental services business, we increased it'll for almost 100 million. So.
We think we're positioned well there.
And we're committed to that strategy, but obviously you know with what took place in the quarter with the impacts are.
We did see a decline in those rental service utilization numbers and as well as our heavy fleet.
Reflective of the environment.
Check clearly weren't came off was in come back so, but I think you're right, we could be positioned very well here for those customer dancing that might shift to.
Short term needs and be careful with their capex.
Yeah, I guess in the interim.
Can you I would assume that the net net rental capex.
We will be down but.
Could you provide us with an update on what we should expect there for the year.
Yeah. So I mean, we were we've been aggressive or last year. As we've said were both on the rental full rental services models that were committed to and so.
We proved it out in our legacy businesses.
You know we increased it over last year, but we are going to slow that down now and.
That is something a conscious decision that took place in the first quarter.
Okay, I'm going to turn it over thanks.
Thank you here thanks.
Thanks.
Your next question.
Yes.
Good morning.
So you talked about some of the auctions or that youve taken to reduce expenses.
What is the scale of these cost savings.
Well you know, it's a combination of lot of factors there were really.
Focused on some of this discretionary expense we've taken those down.
Secondly, hard.
And as we said it starts with the senior executive in the board. We've we've all discretionary is being pushed to a minimal.
We're also though we're being very conscious and how we go about this in the first quarter.
We things came off quite quite a fast.
With the government to.
Decisions that were obviously had to be made.
We felt it in mining we felt it in construction.
But we were being very sensitive to our.
Skilled labor in particular in or human capital in general because one things you. We've worked hard to build our infrastructure that provide the demand signals and meet debentures customers and grow the businesses. So we went into internal work shares through a.
Usage of vacation and bank time and training.
Thats certainly created a an expense, but and then of course, the productivity and revenue streams came off but so that was a short term moves that wasn't necessarily an expense cutting but now we're moving into.
Governmental work share programs and were very aggressive on the discretionary so.
What we're monitoring it relative to the modeling or revenue per se projection. So we do it on percentages. So that's how we're working through it.
Okay and my next question might be a little bit early but maybe talk a bit about.
No.
What's your learning from.
Coping 19, I know some companies are talking about.
More of their staff working working from home longer term.
And how do you think about talking about looking up post pandemic.
Yes, great question I mean, we.
We were very granular I'm, just positioning the business protecting our people meeting the customer demands in the shifts that took place there and then I mean, I commend, Mike and act on how we worked very hard to position our business for the for the long term protecting it.
With the balance sheet, but.
So.
We are now just shifting okay. How do we want to look when we come out and then what are the changes are going to take place I think you're going to see some significant changes were learning how to interface with internally. It a little differently I think there'll be some changes in some of our travel behaviors as well as Howard interfaces with our suppliers and you know what we're we're learning how.
To be effective in those areas as well as you know I think what we're we're also seeing is the connectivity with our customer machines. That's been very helpful to really get reads on the hours logs and things of this nature and so we're going to continue to leverage.
These investments and I think that will be very powerful in the long term health interface for customers as well.
And as we've been saying, we put a whole lot of work into.
Our development of data and interface with customers with smartphones, that's coming along so I think that's going to accelerate in some areas there.
Yeah I'll leave it there thank you.
Thank you.
Thanks.
A question from Michael from Scotia Bank. Please go ahead.
Hey, good morning, gentlemen, and welcome Mike.
The first question.
Hi restrictions of extended largely.
You know through April in Ontario, Quebec.
I think those restrictions of actually limited more activity.
Anyway, you can guys you guys can give us a sensors activity levels and how they trended. So far are like maybe give us a sensor utilization rates in your rental fleet or in your installed fleet just.
Yeah.
Again, we were we were impacted there I mean, we had.
Some real hard stops, particularly in mining and we saw mine is going to care and maintenance and things of this me, but you know that short term and we have to deal with it but again, we're trying to be sensitive to what we what we need to be when we come out of this.
We have had some you know it's all dictated on unloaded the.
Permit decisions, obviously, you're reading it is like we are things that are going to be phased in here in the in an orderly manner I gather.
We won't we don't want to get too far ahead of ourselves in here in terms of speculation, but we have seen some.
Signals that machines are starting to uptick on the hours log and Oh, we have had some demand signals come in for some skilled labor, which is good and some of our rental booking activity has improved recently, but.
If we don't want to get ahead of ourselves here, it's gonna be a phase in and.
We're going to be their position for our customers.
Maybe just one thing to add to that I think.
Again, we referenced the diversification of the business and so I think you have a couple of things no geographical and the size and the customer base are pretty broad, but I think also.
Regionally, our customers are making decisions and Scott mentioned, we're trying to make sure that we're well positioned there to step in and support them at the right time, and so as they make decisions to go back into a phased production and so forth, where there and I think that does bode well for us. When you think is the you know the essential service nature.
Yes, but also as our customers make decisions in amongst the governmental regulations. You know, we we do benefit from that diversification and ability to and reach that we have so we have out well distributed branch network, which is there to support.
Okay. That's helpful color. Thanks, guys and then just me slipping chair service business I mean.
Just the implementation of of helps the caution social assistance present any challenges.
No that could increase the cost of doing business for limited throughput.
Your current facilities or do you think you know.
After a period of adjustment.
Returning to somewhat normal operating levels.
Well, we've been very granular on our.
Color cobot protocols and procedures both in in the operation within the operations as well as externally on the field service and we're working very closely with customers and how were interfaces and whether we're in their facilities that were opened their their job sites.
So that's that's our focus we think.
No I commend our teams I think they've done the net job and moving quickly on those fronts.
You know, we're able to operate we are being sensitive to how we're scheduling shifts how we're working through some of our procedures. So I would say theres been some added cost me we hit we saw added costs due to this.
Quickly in the quarter and again, we're we're trying to positions to your steer the business through an unprecedented time.
So there's cost so should that book.
Few err on the side of safety and proper protocols. So so that's how we're doing we so far we've been able to function with the demand signal, we've received particularly in the central service areas and our people have done.
Really pleased with our people adapting and adjusting should be coming.
Okay perfect well. Thanks, thanks for answering the questions guys. Good luck as they say thank you.
They safe.
The next question is from Devon Dodge from BMO capital markets. Please go ahead.
Hi, Thanks, Good morning, guys.
Good morning.
For.
Much of the last couple of years availability as used equipment has been a bit of the challenge.
Just wondering if you expect to see more used equipment coming to market.
It could provide a say opportunities were Carmont, then I guess, yeah. So how difficult. It then to go out in stores. This equipment given some of the travel restrictions.
Okay. So this is an interesting question are we.
So we saw significant uptick in our U.S sales.
The equipment side of the business.
Europe overall, 21% and then the construction side. It was I think it was over 30% so.
So there is some shifts going on there I think part of that might have been also the shifts taking place with the FX. The weakening dollar show in actual fact, we think we're positioned well with our inventory levels. We did see a shift where the RPL came off.
Fairly significantly due to conversions, but also due to equipment being returned but a lot of that equipment was was low hour. So the demo.
Classifies demo classic inventory or low power it went up over 60%.
We think we're positioned well when the demand signals improve to meet customer needs, because that's going to be attractive iron, particularly when you when you compare to the.
Some of the new pricing with the effect shifts so.
So we think we're positioned well there.
In the past and we've always said part of our strategy is to be very optimistic in terms of buying iron.
We we held off in the quarter there was a.
Fairly well I mean, there was a couple of moves we've made.
We're being opportunistic, but obviously, we're being very careful and focused on our balance sheet.
And.
Our position there for the long term, but we are I mean, we have a pretty good skilled team and how to buy iron. So we've got good resources and there were monitoring that we're going to be careful but that that could become a tactical move here as things progress, but we are pleased with our position on used equipment.
Okay. That's helpful, maybe coming back to I don't want to take its questions just [noise].
Are you seeing or do you expect to find opportunities coming out of downturn, I guess, I guess, when I'm thinking about it or changes in market share.
Yes, some product support.
Cognition availability I guess anything like this that we should be considering as an opportunity for carmont coming out of this downturn.
Yeah, and that's what we're trying to be balanced here in our approach to obviously, we have to be attended to short term, but you don't want to damage the business and the infrastructure. So we're being trying to be as careful as possible with our 13 or people.
Because you know it's going to be interesting to see how governments react with infrastructure spends to try and stimulate some economic activity here. So we want to be positioned well for for that.
On the product support site, our rebuild activity in Q1.
I think it was up over 20% at the dealerships. So again, you might see a shift where customers are going to move to rebuilds are quoting activity. There is healthy. So we'll get we want to be positioned if that really starts to.
Shift into.
How customers are going to handle their fleets and their their capex.
Maybe one thing to add to that we can you know you mentioned, we mentioned in our statements that we've we've invested on some of the integration and technology side as well and I think coming out of this you know what this does allow us to do is is you know look at some of those opportunities to advance that integration.
And and come out on on the.
Ill quicker out of the gate with an integrated platform and and move some of those projects forward and so taking advantage of those opportunities as well.
Move our business forward and integrate the acquisition.
In the eastern part of the business.
And that's good question first quick we worked hard at a transitioning the first phase of our hormone cat business onto one platform and so there was a cost associated with that book you feel comfortable and that's that's gone wall.
That's good color I'll turn it over here.
Thank you.
The next question from Ben.
James Please go ahead.
Good morning.
Morning men.
I want to circle back I think it might have been the first question on on the rental business and the shift to rental.
I can appreciate that some customers might prefer.
Hi, my migrate to the channel in the downturn, but overall what generally.
I would think that if demand conditions go down.
There's pressure on rental rates and utilization and you guys did report a little bit of.
Pressure on utilization rate in gross margins, but I'm curious what's been happening to rental rates is that not become a more competitive.
Environment to present and what.
Just in work or what could we expect you know for the quarter or the year without getting into guidance just.
Qualitatively, what's happening in those in the rental market right now.
So in.
We look at this then over the long term and if you look at the market data that we continued to process long term, we see the rental industry and.
Overall dollar opportunity continue to increase and that's we've seen that year over year for several years now and so it's played out well in our legacy business for us and we see that's why we're we've been investing pretty aggressively and get back in the metric tons to expand that that full rental services model, what we saw in the quarter, which.
We saw some tightening but overall, particularly in the legacy the the rental rates were holding up it's just that the.
And even we had growth in Ontario, we had over roasters, we had over 6% growth. We're moving really well in January January and February and then everything just just came off and particularly the thing and get back was we were we were down on a revenue the first quarter, we've invested heavily.
And the uptick on the.
The load of the fleet. So that was a drag on the margin that was that was a big shift for us we didnt see that a.
Progress, but we're committed to it and as we said, we're only midway through that strategy, where you get the full realization of the model with dispositions. So that's got to just kind of.
Stay committed to it.
But you know what we feel we're we've invested well there with technology and we can compete effectively but.
But there is going to be interesting and how it plays out the on on rates, but it wasn't there wasn't any real shocks in there in the first quarter.
Yeah.
And you haven't seen in April yet either.
Well in April we are starting to see a little uptick but to the other thing that we saw and from the rental services was our our winter products you know the propane and some of the building supply is it wasn't maybe as harsh in some areas. Prior so that came off a bit force as well.
Okay.
And if I could just clarify what's happening in materials handling.
You said in the disclosure your sales were up 11% I think orders were up 17, but in that area rentals were down.
And just the those trends of of the sales and orders being up.
Was that great through March as well or has that side of the business shown any slowdown.
Since the covert hit.
Yes. So we were we were trending nice those numbers are reflective Ben I think the team really worked hard last year you know it's.
We did a lot of restructuring in there last year with sales management territory coverage, particularly in Ontario, So that's where.
Part of the team, they're making good progress we saw good bookings in the sales revenues were up and then it did come off in March relative to some of the coal that impact.
As did the service numbers and so because we've been very focused on or service excellence strategies and tactics in there. So we did feel it but we were pleased with the progress on the the equipment sales and the material handling business.
Okay. That's helpful. Thanks, guys.
Thanks Ben.
Dave.
The next question.
Hi, Matt.
Yes.
Thanks, very much and good morning.
Most of my questions have been asked but then maybe I can get you to just comment on how the supply chain has been functioning across the dealership.
Battlefield, and Sunoco and what you're thinking any differently about inventory across one of those businesses.
Yeah. So so far in the I mean, we feel we're positioned well when you look at those inventory levels that are only down slightly from last year in the quarter and think we commented last year, we were very aggressive in some of those uploads and.
How we're managing prime product sales and positioning because we want it to be aggressive with our integration plan and that played out fairly well. So I mean, I think our our suppliers have done an admirable job, particularly caterpillar our parts inventories are up slightly.
We're we're.
And weekly console with Caterpillar and.
In the first quarter there are parts supplier was solid fill rates were good.
Certainly they've they've stated they had some temporary closures and some plants, but we feel we're well positioned fairly well and we're staying close to those signals as things progress but.
Caterpillar was opened on their call that they're being sensitive to the demand signals the mill adjust accordingly.
Okay and then in this environment, obviously customers are going to have a lot of focused on.
He cleaning and pp E and I'm, just curious whether battlefield has been adjusting its market offering to respond to that need.
Yes, so, particularly with our jobs like solutions group, we have been sort of pivoting and some of the customer demand signals in there with some some pp and I think up our team's done.
One of job and they're obviously in some areas there is tight supply but to the we are pivoting and some of those areas Sherman.
Okay, and then just lastly, I guess in particular at that Cat dealer and that battlefield are you seeing customers and new more to online channels in a noticeable away and cannot be a competitive advantage in some way.
Yeah. So it's interesting we be up.
Monitoring that we're starting to promote that work as we put.
Investment there.
One we didn't really see any real shift, but that's something we're monitoring closely as we move forward. So we'll see how that plays of that could be another shift we see due to this school that impact.
Thank you that's all for me.
Thank you Shirley thanks.
Thanks once again.
If you have a question.
Next question from Maxim.
From National Bank financial please.
Hi, good morning, gentlemen.
Good morning, Max funding mix.
Most of my questions have been answered, but I just wanted to follow up club.
Relations Scott's commentary.
Did you see that there was a little uptick in April in relation to is that utilization rates were generally utilization I'm just trying to clarify that statement if it's possible.
See I don't have the data yet on on the rates but.
Oh and get too far ahead for self here, but what we saw with sub.
Bit of an uptick in some of the booked rental business.
No. We don't have the final numbers for for April Souls, we'll see how it played out there, but and there was a bit of the.
Uptick in some of the a technician demand so.
Because we have seen.
Some of the mining activity improve as well as construction, we see the hours.
I'm done machine started improve slightly so but.
This is going to be I wouldn't want to speculate on thing. It's a it's a very complex environment, obviously and as.
We'll see how the phase ins go here, but.
Feel we're positioned and we're really trying to be careful with.
Skilled labor.
Right well mix mix looks like and I guess, I mean, a quick financial visualize that someone obviously that was a.
A tail off.
At the end of the quarter and then.
At least.
They pull so far it hasn't gotten worse I mean is that sort of first assumption because I mean, I'm just thinking long term.
Let me give you a more color to make sure. We use it came off hard in March I mean the industry.
The industry.
The industry activities and marks and I'm, what I'm talking about as the overall industries for for equipment sales.
That came off almost 30% so.
You know that's it that's.
Matic shifts so we'll see how things play out here, but were you know it's it came off heart so.
It's a very complex environment and.
We've got a ways to go here, but for.
Our focus as a position in this business best we can with short term moves, but also being very sensitive to this infrastructure. We've worked hard to build so we're positioned will we come up.
Let me let alone.
And that actually just maybe one quick one on Syntel reference to the competitive environment is there anything changes any changes there any emergence a few competitors or maybe any color. You can you can provide their silicon loan.
With that understanding what's going on.
No no shift in terms the competitive environment, what we're pleased about it simco bookings in the first quarter was I think it was a records were over 100 million. So we're very pleased with that obviously.
We we had there's a difference quarter over quarter on timing of projects and how we progressed. So so that was a bit and impactful.
We continue to stay very focused on or disciplines on project execution and how we.
Our building the.
Cost structures the projects so.
But the we're pleased with that booking level and now were we did have an impact was simco. Some of the service areas came off but.
We still feel signals, we're getting right now is those bookings, we don't see a big change as of right now but on the project.
Completions, but we'll see monitoring closely.
And Im sorry, maybe just to follow up on this.
Is it just that the nature.
The timing that's.
Really resulted in this very strong bookings quarter or is it your go to market strategy I'm, just trying to better understand what what drove that there isn't it.
Well, we're very focused on our go to Mark stretch, but I think it's also was it was driven by the customer.
Because we.
It was them, making decisions on there on their.
Capital.
Decision. So this is mainly due to but the good thing was we were position or we're pleased with our win ratios.
Right. That's wonderful can you think.
Thank you Max and cosmetics.
Thank you.
For the questions registered at this time I'd like to turn the meeting back over.
Great. Thank you Donna.
Before concluding the call I'd like to remind listeners that our annual meeting of shareholders are the held today at 10 am.
Again this is a virtual meeting only the website details are available in our press release and on our website at Torma Dot Com Kurt you to look at that.
Thanks, again for joining us today and that concludes our call ticker be safe.
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In the not because it had been.
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Okay opinion.