Q2 2020 Ufp Industries Inc Earnings Call
<unk> earnings Conference call at this time, all participants are in listen only mode. After the speaker presentation, there will be a question and answer session.
Good question during the session you will need to press star one on your telephone. Please be advised of today's conference is being recorded do require any further assistance. Please press star zero I would now like to hand over to your speaker Mr. Dicks golf year, Vice President of business outreach. Please go ahead sorry.
[music] industries second quarter 2020 conference call.
Call today, our CEO, Matt Missad CFO Michael.
Michael <unk> prepared remarks, and on the call will be opened up for questions.
This conference call available simultaneously.
To all interested investors and news media through our webcast at Www Dot dot.
A replay will also be available at that website through August 22nd 2020, before I turn the call sort of Atlas.
To remind you that yesterday's press release at today's presentation include forward looking statements as defined in the private Securities Litigation Reform Act 1995.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projection.
These risks and uncertainties, including but not limited to those factors identified the press releases and then the filings with the Securities and Exchange Commission.
I will now turn the call over to Matt Missad.
[music] described second quarter twice.
Yeah.
[music].
People are essential customers.
[music].
Fortunate to work with a great.
Great well even.
[music].
You asked the is yet.
[music].
Overall second quarter.
Okay.
Net sales of 1.2 fortune.
Oh slightly from 29.
[laughter] quarterly net earnings of 66.5.
Yes.
Dollar per share.
[music] order was <unk> point.
Oh 24 to six.
Versus 29.
[music] the quarter were 141 point.
Yeah.
[music].
We are on track to meet our 2020 Bucks.
[music], yes, sorry.
Core is very different by market.
I didn't really bad.
Yeah.
[laughter] Shining star.
No no.
Versus 482 million.
Yeah.
[music].
20% core.
I mentioned, the corporate group unit sales.
<unk>.
But.
The Maximus plot project channel why was the strong progress.
[music] branded products grew.
20%.
[music] as well as called <unk>.
Our new fire retardant <unk>.
Oh, hey for what.
I want to Satchels consisting of the mining.
23%.
[music].
Right.
Well that's well.
You are.
Right.
That's fine.
So I'll give it increased 9%.
Branded products to recover exceeding 2019 units by buffers.
And now trail, playing I mean, you're in the basin.
First I personally.
<unk>.
Q1.
[music].
Oh.
[laughter] 2019 sales dollar.
[music].
Deeper bar.
Operator.
The composite production.
Hi early Q4.
Oh.
Retail and E commerce.
Ecommerce sales.
Well, 119% from a year ago more consumers were forced to work from home shopped online.
And do you have your retail solutions.
Operating profit was $54.6 million, 94% or 20 Nike.
More than three five unit sales.
Overall, we feel bullish about that holding strong sexual current environment.
Oh yeah.
Sales of Cob product shortages.
We expect the sale trends to continue our grateful for our vendor relationships and five like the which are a great.
Feature of our customers.
In addition.
Oh, well Becky.
Expanded it.
Got it now so national.
Let me start a construction.
They saw sales declined 16%.
Net sales were 359.2 million versus 414.8.
25 team.
Okay.
Declined 5% factory built units declined 20%.
Commercial decline lacking for side by side Bill Yeah, that's declined 15%.
Operating profit was 22.8.
The quarter versus 25.6 billion at 22.
Many older slow land development process and Mark given the uncertainty and that may lead to a slight.
And at some point the future.
However demand remains on track for band No capital <unk> and is tracking well expect to Bob.
But can you go probably rebounded nicely, where they have to restart manufacturing.
Order files are very strong.
What some customer model, how 60 anyway.
<unk>.
New product in the construction segment with good growth for the quarter property, forming hardware systems.
Outdoor products.
How big will continue to be strong single family multifamily that strong order.
Yeah.
Oh cycle and related shop, with United acquired 27% in the second quarter.
Net sales were 224.4 million versus 291.2 billion at 29.
Reported operating profit was 18.6 million versus 26.1 billion in 29.
Yeah, sorry.
Your next significant sales decline from customers in the double this manufacturing industries.
So I'm talking to her for about 50% year over year due to cold weather related shopper.
You are industrial didn't notice.
Randy you continues to recover.
[laughter] Prashant golf and industrial specialized moving bought deal Crazy and OEM furniture part.
Continuing to work.
Back in agriculture, durable goods outdoor equipment and certain only I thought your manufacturers and give us a good indication the impacts our industrial business going forward.
Yeah.
Sales were down 10% purchased 20 vaccine.
Profitability of cool.
Retail demand for our products increased in our Mexico, and Canada operations.
International operations industrial were impacted by cold.
That's the U.S. was a tail suffered those product lines.
Yeah, it's all about second quarter without requiring the lumber market.
Well, we focus on sale the industry is focused on sales jobs and the water market, where they provide a tailwind for sale stops.
Well how hard it slightly in early April they thought here.
[laughter] enquiries.
So no I was up $200 per thousand Borski offered mid April.
Around lack of popping index is $175 per thousand board feet above it.
The man has outstripped supply Cabo Jorge.
While demand appears to be stop or at least the next earnings.
Based on current order file and buying any for government action.
We have struggled to keep several haven't stopped working with our vendor partners. They all available bacterial serve our customers.
We are not probably have safety stock and most of our product line.
So what's the outlook for the balance point why.
I always the U.S. a strong economic foundation.
And for all of that business.
Dave Shotwell allowed for real estate.
Individuals suffering from a lost their jobs like.
So if the opportunity to make the let me.
Navigating through called responses disruptions in many markets and the election year challenges will be difficult, but not at all.
Yes, no time thoughts or deliberately packet and he will create irreparable situation.
Yeah, Hi, Dan optimistic outlook that logic, south fiscal policy walkway personality and Oh.
I expect it on a majority of Americans braced free enterprise and personal responsibility.
You're right he plans to continue to operate state.
Parts of our business, which rely hospitality and Bath entertainment venues, maybe challenged longer than we originally forecast while other social retailers should continue to remain strong.
I think that's models take into account I think their cost structure, both our manufacturing operation yesterday basic part of the alignment of our incentive programs to pre bought the operating profit and return on that.
And while that part of our original 2020 flat our travel expenses reduced dramatically, but we do more activities virtual.
It's helped reduce our overall last year at cost as a percentage of golf ball.
I still believe the personal relationship are critical business and comedy culture, So travel well be faster.
We can utilize technology to reduce the frequency aberrational travelers future.
As you know very strong balance sheet generate a terrific cash flow during the second quarter.
While we keep a lot for a while natural strength of our customers, we still see several opportunities to execute our strategic plan and continue our long term fast moving sales growth crop topic will have shareholder returns.
They are capital allocation philosophy of returns to shareholders and expenditures for grow new products and manufacturing efficiency.
In April we reduced our 2020 capital expenditure budget by 20 million.
But given the performance thus far we will have any dollars back into our total although it's not likely they were all its that due to while lead times on equipment manufacturing and construction.
We still have an Apple I fly that acquisition opportunities and were able to close on the acquisition of T. at our last week, which will help our industrial so flat.
We see many acquisition opportunities in our business your boss.
While the black black rates on certain deep in the near term our strategies are longer term, we hope to utilize our strong balance sheet to drive additional growth and profitability.
Well above our target on a wide range.
Our capital availability stock position to take advantage of additional opportunities, including somewhat bigger opportunities to help us reach.
50% annual growth target.
Through acquisition.
[laughter] about cash dividend yesterday or approved they called it a half that dividend payable on September.
And as always our focus remains on <unk>, but.
We will look to deploying capital in the best way possible through that flat.
Our January 1st 2020 reorganization, well market base, rather than a geography based model continues to go well.
Experienced management team to manage through these top five tremendous black.
Yes, the five and exploit opportunities that other companies don't have has driven our exceptional performance.
We couldn't have achieved the exact numbers all without our exceptional people.
They're focused only increased my optimism for the future as well.
I would say back a bit machine or leadership at the bottom of the by implementing the future strategy I think a tremendous growth in equipment potential and each site.
Now I'd like to turn it over to Michael review, the second quarter financial results.
Thank you Matt.
Quarter provided another solid example of how your piece balanced business model and diversified product portfolio is a great advantage in challenging times.
Our results this quarter highlighted by 24% growth and operating profits at 140 basis point improvement operating margins to 7.4%.
A 200 basis point improvement in our trailing 12 month return on invested capital over 15%.
Operating cash flow of 147 million more than two times higher than the first six months last year.
Total liquidity of 562 million at the end of June a $170 million increase since the end of first quarter.
Moving on to highlights from the income statement.
Overall net sales for the quarter were flat compared to last year and consisted of a 3% increase that are selling prices substantially offset by 3% decrease and other units sold.
Results by segment vary greatly was exceptionally strong unit sales growth our retail segment offsetting unit declines in construction and industrial which were more adversely impacted by the pandemic and stay at home orders.
Fortunately for US this profit consumers to initiate more home improvement activities as the quarter progress, resulting in strong order flow from our retail customers.
Breaking down our sales by segment.
So the retail segment increased 26% consisting of a 22% unit increase and a 4% increasing prices.
Organic unit growth was 21% driven primarily by a pro was outdoors essentials and dimensions business units.
New product sales for the retail segment were also strong growing by nearly 16%.
The sequential demand trends within the segment continued to remain strong.
Sales to the industrial segment.
Were impacted by stay at home waters as businesses of many of our customers wanting to Sachin.
Travel restrictions also impacted our ability to gain share, adding new customers and additional locations of existing customers.
As a result, our unit sales dropped 27% for the quarter.
Fortunately it states began reopening or economies, our sales rebounded from being down 32% year over year in April to being down 14% year over year in June and we're optimistic this will continue to improve.
[music].
Finally, our sales to the construction segment decreased 13%, resulting from a 16% decline in units.
Organic unit growth dropped 18% and was comprised of a 5% decline in concrete forming a 15% decline in cycle, a 20% decline in factory built and a 29% decline in commercial.
As with the other segments, we experienced a significant demand improvement within the quarter sales rebounding from being down 19% year over year in April to down 6% year over year Jim.
Moving down the income statement, our second quarter gross profit increased by over $18 million or almost 10%.
This increase was comprised of a 28 million dollar improvement in retail and a $3 million increase in international offset by a $6 million decline in construction and an $8 million drop in industrial.
Our gross margins improved within each of our business segments and increased overall by 140 basis points.
16.5% due to a variety of factors. Notable drivers include the impact of rising lumber prices that products, we sell the variable price like pro with pressure treated lumber and strong organic growth and leveraging fixed cost within the retail segment.
Continuing to move down the income statement total SGN expenses increased less than $1 million <unk>, 0.7% as an increase some bonus expense was offset by temporary decreases in our medical advertising and travel related expenses.
Bad debt expense also declined with our trade receivables almost 95% currently at the end of June.
As a reminder, a bonus plan is based on a combination of pricked. All this operating profit and return on investment which are both considerably higher this year.
Below the earnings from operations by the equity investment portfolio up our Dallas or insurance captive rebounded to report a 2.7 million dollar unrealized gain during the second quarter compared with $200000 gain last year.
Moving on to our cash flow statement.
Our cash our operating cash flow this year approved by $76 million compared to the same period last year, primarily due to an improvement in earnings and an increase in accrued liabilities since year end.
We measure our cash cycle to assess our working capital management and for the second quarter and improved to 49 days compared to 53 days last year due to a reduction our day supply of inventory driven by strong demand and lean inventories at retail segment.
Investing activities consisted primarily of capital expenditures totaling 47 million, including expansionary efficiency related capex of 17 million.
We've also spent nearly $19 million business acquisitions, primarily for class design in architectural millwork and March.
Our previously announced acquisition of TNR lumber occurred in July.
Financing activities consisted of $3 million net debt repayments $15 million dividends and $29 million share repurchases from the first quarter.
With respect to our balance sheet at the end of June we had approximately 37 million in net cash compared to 192 million in that that last year.
And our total liquidity increased to 562 million at the end of June consisting of $201 million in cash and 361 million in availability under our revolving credit facility.
This provides us with ample resources to not only operator business, but take advantage of wise investment opportunities during this challenging Todd.
That's all I have in the sanctions Matt.
Thank you Mike now I'd like to open it up for any questions you may have.
As a reminder, ladies and gentlemen sounds good question, you will need to press star one on your telephone to withdraw your question press the pound <unk>. Please standby, while we compile the Q any roster.
Our first question will come from Ketan Mamtora with BMO capital markets. Please go ahead.
Thank you good morning, Mac and Mike Congrats on ebay strong Walton.
Good morning.
Starting off on the reader inside my.
Can you talk a little bit about the strength that you saw in June has that continued into July as well if you look at some of your.
Sort of key end markets in part outs with its on the full woodside or the decorate goes the outdoor essentially side.
Maybe just give us some sense I know you would not want to get into sort of specific numbers, but at a high level.
What do you are seeing as far in July because there's been some substance on that a lot of this on the DIY rightside, especially it's pulled forward in demand versus kind of fundamental improvement in demand. So maybe just give us some sense of what you are seeing.
Yeah. That's a good question, Keith and I think as we look at it.
I would say at from a high level view the demand profile is still very strong.
And you can kind of look at lumber market and see that the demand for that product continues to remain strong. So that's a good indicator from our standpoint, I think there's a lot of people who have projects that have not been able to get the materials they need.
So.
We expect that the man to to continue as I mentioned before at least the next 30 to 60 days you could very well continue beyond that but.
It seems to be strong at this point.
Got it that's helpful and then on the degree to side is it possible to quantify the capacity increase that you're not looking act, which is going to come on later this year.
Yeah, I believe the capacity increase is gonna be somewhere between 25, 35%.
Got it and so all of that will be a really bone spring of next year I'm, assuming is that how I should be thinking about it yes.
Got it and then on the E commerce side within retail is it possible Mac to quantify how big doctors, but then the retail site.
Well, it's possible, but we haven't really broken it down at this point cadence. So I can only give me the high level perspective on it and I think yeah as I mentioned in the remarks, what we're seeing is more people that are working from home probably are looking around their houses and seeing all these projects that need to be done.
And so there they're ordering online and that's really really helped to explode our E commerce initiatives.
Got it and then just one more on the on the lumber side no I used to you've seen a big spike in both southern yellow pine on SPF prices.
From what Youre seeing <unk> on the curtailments that happened.
In early March you need for I start on come back online or is there. Some not is still ramping up based on what do you are seeing can you give us some sense.
Yeah, I I think there has been most of that if not all of it is back on line now whether it's running at full capacity I couldn't tell you.
But I just I do believe that the demand is there and its outstripping the capacity and it's going to take awhile for that to catch up but as with any kind of market move it's always a difficult challenge to try to guess what exactly when that's going to happen but.
Our teams done a great job of managing their inventories and managing their purchases and working with them. The various mills, both domestic and foreign to try to make sure that we have at least enough product to get to meet the demand as best we can.
Got it that's they had fun I haven't done a door. Good luck for the rest of the year. Thank you good.
Thank you. Our next question will come from Steven Chercover with D.A. Davidson. Please go ahead.
Yes. Thank you good morning, everyone. Good morning, Steve Yona Yona was gave me a flash back with your Batman reference [laughter] like got done that.
Yes. Thank you.
So you know, it's extraordinary that sales and retail actually accelerated in the quarter to June exit rate of 47% growth.
I guess intuitively I would've thought that DIY way projects would have tailed off as people went back to work, but you, saying, it's going to be stronger than that.
At least next 30 to 60 days.
So have you had any shortages in your raw materials, such as yet southern yellow pine kept sales from being even stronger.
Yes, Steve I think that's been one of our challenges.
During the quarter as we mentioned the mill curtailments impacted it but yes, we believe we could have sold and I can't quantify but we could have sold significantly more had we had material available.
Okay, and so numbers still going parabolic your will you do anything at some.
I'm pleased to protect yourselves to win lumber eventually hit the top in reverses.
Oh, we certainly will we certainly are we were very cautious about it we're probably sacrificing a little bit of margin today, just to make sure that we don't get into a negative situation and we we work with our vendors very much with our vendor managed inventory programs to help.
Alleviate some of that potential risk.
And I know you said you have no safety stock on one hand. So it is you know the way to protect yourself.
Basically by you know turning the inventory as rapidly as you always do correct.
Okay. Thank you and then in industrial construction.
Absent any backslide in.
Reopening do you think that the trajectory.
Sure the throughout the quarter, you get your back to flat or even modest year over year growth in the crude corn.
I think that's a great question I'm not sure I have the right answer to that one yet Steve I think I'd out would certainly be our hope.
But I really just depends on how quickly things ramp up the trend line is very positive we expect that trend line to continue.
I can't tell you, whether or not it's gonna be back to year over year by the end of the Q3 or not but we still see very positive improvement trends.
Okay, I'll turn it over thanks, and good luck. Thank you Steve be say.
You too.
Thank you. Our next question will come from Rueben Garner with the benchmark company. Please go ahead.
Thank you good morning, everybody morning Ruminant.
So the gross profit or you guys.
Negative ratio makes my charts.
Kind of Coke, but the gross profit growth. It was very impressive in the quarter I I guess my like what I understand the retail elements of it can you help me on the construction in the industrial side the margin improvement that you saw there even with.
If I recall correctly prices were up in both of those segments. So.
I guess that was a headwind volumes being down also had when what is it just mix. That's an offset there was the lumber movement within the quarter, a a driver and those two segments as well or is that just I guess just tell me how how you got margin improvement in construction and industrial and but in the quarter pizza.
Yeah, So let's start with let's start with construction I think a lot of that has to do with mix in the construction space. It also has to do with probably a year over year comparison, where we had some jobs that were unprofitable in 2019 that impacted gross profit negatively.
We obviously didn't have those in 2020, so there's an improvement there. So overall I would point to the mix shift as being a bigger driver on the construction side.
On industrial I wouldn't I would say that makes it isn't part of that issue or some manufacturing efficiencies are a part of that issue.
And I would also point to a kind of customer concentration in customer mix as well.
As we talked about at the end of Q1, we were looking at our customer base in the industrial market and so there's a number of customers that that were relatively modest size and unprofitable and I think the industrial team has done a really good job of working to either make those those.
Customers profitable business or actually we've moved on and probably priced ourselves out of some of those types of opportunities. So.
A little different story between the two segments, but I think they're both really positive trends that we hope we can keep moving forward on.
Okay, and then on the growth side for those two segments I mean, you've got the pull forward question on the on the retail side is the is the inverse possible with the construction and industrial business, where you know some of the activity in the second quarter was maybe not cancelled but.
Delayed and you could get some some catch up or hold Joburg until you know, there's an economic recovery or do you think a lot of what would have been in the second quarter is probably been canceled in those two segments I know theres a lot of moving parts, but you know the best you can pick it up with that.
Sure Yeah, I think a I think construction definitely it is just kind of a delay.
You know unless something else fundamentally changes.
The projects that were proposed need to happen and so I expect goes to continue moving forward and so I look at Q2 is just kind of a pause as I mentioned in the remarks, there might be some issue down the road with a lack of available lot simply because the that the homes.
Builders stopped developing for a period there but.
I think that is a very positive trend for construction.
And on the industrial side I think you there's a large demand that was on Matt for a lot of those durable goods. We mentioned that things were shut down for a period of time and there's a shortage and those products to a lot of which go into into housing projects.
HB AC systems being an example, so I think that there is a catch up that should happen in the industrial space as well the only issue from my perspective is how long it takes to kind of get caught up and back to that normal level.
Okay, great and I'm going to sneak one more and I got asked my quarterly decorators question. So the.
I think if I heard you correctly down just 1% in the second quarter year over year I know last year. The first half you had the the load in.
The load in with Lowe's to comp against is there any way to think about kind of what the fourq underlying organic growth was for that business.
And did you did you Miss out on any business there because the capacity issues and this is a lot of questions in one but it is the is the capacity that's coming online in early fourth quarter is that a pull forward of when you were I know that's something you've already announced that is that a pull forward and timing because demand since a strong.
Yeah I think.
Probably the same story is true although to a lesser extent with with the decorators product lines I think.
Product availability certain collars certain styles.
Was impacted a little bit and the demand.
The demand flow was a lot different than we probably would have predicted at the beginning of the year, but that the idea of creating more capacity, we know that the products are selling well.
We're excited about where that's going and a as we pointed out the decorators fault in boys product lines that would the ovations technology that has a a growth trajectory that's greater than the rest of our product lines to show a lot of opportunities there for us to grow and improve.
Yeah.
Great. Thank you guys and congrats on on both strong quarter, if that's something environment. Thank you Rubin.
Thank you. Our next question will come from O'neill with Merrill with Sidoti. Please.
Please go ahead Sir.
Hey, good morning, everyone.
Good morning linear.
My first question was on the.
Cost control side, great job on that you in a leveraged with a 42% there.
How much of that do you think maybe I missed due to maybe some temporary factors maybe some some inefficiencies from from customers and that type of thing.
Well, maybe cutting some some manufacturing expenses that are kind of on the temporary side versus maybe some of those execution or performance on your Kinks part.
Yeah, I don't know that I can really quantify that for you Julio went into the different categories. We do know that there were some that I think are more permanent in nature.
Some of the some of the efficiencies that we came up with I think the travel issue that I called out is one that part of that will be permanent and part of that will be temporary but.
That's that's been a fairly significant driver for us and obviously sales volumes being what they were in the gross profit dollars being what they were definitely helps that trend line as well so.
It's not all just on the cost side part of it on driving the gross profit dollars higher to make that percentage improved.
Mike do you have anything to add on that.
That's right.
Got it and.
If you could talk about any changes on the competitive landscape I think you're a little better capitalize it maybe some of your competitors have any opportunities kind of become clear to you as you progress throughout the quarter.
Yeah, I think there's a there's a lot of opportunities in.
As I said before I think with with uncertainty comes opportunity and I think people are concerned short term.
And so for us it creates a number of opportunities to pursue the a business units strategic plans.
And we really hope to be able to accomplish some more of that over the next you know several months.
Because I think it is a good time to to try to reach our targets and some of the other competitors are in a spot where it makes more sense for us to continue to drive and expand.
Understood and then lastly for me is can you talk about maybe TNR lumber and how it fits with the industrial segment.
Do you still see a pipeline of tuck ins and.
Our the multiples potentially becoming more attractive there I keep.
Yes. Good question. So so TNR really fits nicely into our industrial family of companies, they're very complimentary. They act they actually have some products and relationships that we don't have and we look forward to being able to scale their capabilities throughout our entire network, which is one of the attractive.
Features of of their company and they have terrific people as well and you know we always are looking for good people. So that's a really nice combination.
In terms of multiples and where the market's going again I think as I mentioned there is uncertainty so.
We would expect that multiples may make.
Huh.
There's also a number of issues in terms of what performance has been given covidien other things for these other companies that are looking to market themselves. So.
We're not at a spot yet where I think we can predict that multiples are going to go down or up or whatever but.
I think for US we have a better insight in terms of what we're trying to accomplish and to the extent that people are ready, we're standing by ready to to move forward on transactions.
Thank you we do have a follow up question from Ketan Mamtora with BMO capital markets.
Thank you, maybe just seeking a slightly different tack on Steve's question on some of the you know the construction side of the business mid teen solve the construction side. Mike are you seeing any specific end markets that are doing the lift is better than some of the others. Obviously in Q2 site bids.
Back to build commercial order will hit quite.
Are you seeing sort of it foster recovery in any bond or you know nothing that you can call out I'm just curious.
Yeah, I think keegan from our standpoint.
Our site built operations are very much a regional in nature.
And so I think we have selected the right locations to be insight built.
So the improvement there, which may or may not reflect what is happening nationally, but the markets that were in are still very strong both single family and multifamily. So that that's one area, where I would call that out and as we mentioned commercial or has been impacted probably more negatively than other areas and.
I expect that trend to continue although I do expect a commercial to continue to improve.
Yeah factory built as we did call that out as you know it was down pretty significantly and I think that was due in large part two two mandated shutdowns. So if that recovers I think there's an opportunity there as well.
Got it that's helpful. And then just don't into balance sheet and gotten on location you got a net cash position, which is obviously a bit position to be and.
Especially in these times, but as you know kind of look ahead.
Maybe just talk about no. The priorities you know you've talked about and money and you know, but also said that the older it'd be really disciplined so I'm just talk about capital allocation priorities and and where does no kind of stupid didn't fit in.
In this and if you would be open to doing something like especially the dividend or Nike onetime dividend at some point in time.
Yeah, I think eating that's a great question then obviously our goal is to make sure that we provide the very best return to our shareholders.
We have a number of growth opportunities both within our capital expenditure bucket as well as our acquisition opportunities that we think will yield the best long term growth for our shareholders.
That's where we want to dedicate the vast majority of the capital to the extent that were not able to do that on a good cost effective in a strong ROI basis. Our natural reaction is to return that capital to the shareholders. So.
I would say that right now we have an ample pipeline we have a lot of project and part of our new structure, but I think is going very very well is that each of our leadership teams has identified different areas, where they see opportunities to really drive ROI and Intel they run out.
Those types of opportunities I would guess, that's where we put most of our capital.
Looking at different things with the dividend and making sure that provides a reasonable return to our shareholders will continue to do that as well as we continue to grow a cash flow and grow our bottom line performance.
Got it and that's I think that's what I've done a door. Good luck for the rest of the year.
Thank you can.
And speakers I'm showing no further questions in the queue at this time I'll turn the call back over to management for any further Mike.
Once again I'd like to thank you for spending your time with us on the call. This morning, I apologize for the a bumpy recording information that was out first but hopefully I sound better lives.
We all know that the impact of coal, but in the response to it or going to continue but we're very encouraged by the opening a baseball season, it's a symbol and we look forward to with optimism to a return to more normal activities for all of us have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
[music].