Q2 2020 Trican Well Service Ltd Earnings Call
Thank you for standing by this is the conference operator welcome to the try can second quarter results conference call.
As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation. There will be an opportunity to ask a question to join the question Canyon. My Press Star then one on your telephone keypad shooting at assistance during the conference call you May signal, an operator by pressing star and zero.
I'd now like to turn the conference over to dealt us or hopped President and CEO. Please go ahead.
Thank you very much good morning, ladies and gentlemen, I'd like to thank you for attending the fact that well service conference call. Here's a brief outline of how we intend to conduct the call first Robert skilled liked our CFO will give an overview of the quarterly results I will that across issues pertaining to current operating conditions and they're talking about what we will then.
Open the call question.
Mike Ball with our executive Vice President is also available to answer questions.
I'd now like turn the call them and Rob <unk> to provide an overview of the financial results.
Thanks Neil.
Before we begin I'd like to point out that this conference call may contain forward looking statements and other information based on current expectations or results for the company.
Certain material factors or assumptions were applied in drawing a conclusion or making a projection as reflected in the forward looking information section of our Q2 2020 M. DNA.
A number of business risks and uncertainties could cause the actual results could differ materially from these forward looking statements and financial.
Some of these risks and uncertainties are further amplified due to the current global health crisis caused by the colder 19 pandemics.
Please refer to our 2019 Aaas and the business risks section of our Mdna for the quarter ended June Thirtyth 2020, or more complete description of business risks and uncertainties spacing try again.
This conference call also refers to several common industry terms in certain non-GAAP measures, which are more fully described in our second quarter 2020 M. DNA.
Our second quarter results were released this morning and are available on SEDAR.
Although reductions in activity or typical for the second quarter. This particular quarter saw unprecedented activity declines largely because of cobot 19 market impacts combined with incredibly weak oil and natural gas prices.
Try cans Canadian revenue.
Match these industry declines with revenue reaching levels, even lower than the low Q2 revenue levels in 2016.
Despite these unprecedented low industry activity levels and revenue declines of more than 70%, we were able to mitigate negative adjusted EBITDA levels through aggressive cost cutting measures.
These measures included personnel reductions temporary salary reductions and controlling expenditures and all other areas of the company.
The significant cost reductions in our business at the end of March combined with the cost reduction measures that were already being implemented in advance of the cobot 19 pandemic will result in our annualized 2020 fixed operating overhead and asked unit cost structure being lower by more than $45 million.
Given the already slower Canadian market prior to go with 19, we had previously adopted our business to be responsive to volatile market conditions. The state of readiness allowed us to quickly adjust our business the changing market.
Despite significantly lower Q2 revenue keep Q2 adjusted.
EBITDA negative 6.8 million as an improvement over the Q2 2019 level of 15.1 million.
Furthermore, negative adjusted EBITDA I saw your where your improvements.
Even without the benefit of the 5 million Canadian emergency wage subsidy.
Without the federal subsidy program, we would have had to make further reductions in our business.
Due to 20 Twentys net loss for the period of 28.6 million approximated the net loss of 28 million last year. The comparative Q2, 2019 that lost benefited from 6.5 million deferred tax benefit as a result of the reduced 2019 tax rate.
The company's business generated modestly negative operating cash flow in the quarter before considering changes in working capital.
Operating cash flow before working capital was approximately negative 7 million despite the significant industry headwinds.
However, significant receivable collections resulted in positive operating cash flows.
A 55.6 million.
Try can use these cash flows to repay the outstanding bank debt and on an at June Thirtyth 2020, The company had 26 million of cash on the balance sheet.
A significant cash position combined with our positive noncash working capital 48 million at our available credit lines will continue to provide the company with significant liquidity to whether this current market uncertainty and will allow us to maintain our equipment and good working condition with the potential for making opportunistic investments.
Our Q2 2020 capital expenditures were minimize at 1.6 value.
These expenditures were fully funded through redundant indoor permanently idled asset sales of approximately $2 million, which excludes the proceeds on the disposition of non core service slide approximating two and a half million, which cash was received on July onest.
Additional assets may be sold if a reasonable price can be obtained for them.
Our financial position will allow us to ensure we receive a fair price for any asset sales.
During the past 24 months, we've monetized more than 60 million of strata noncore capital through ongoing asset dispositions by recognizing that the Canadian as industry was generally overcapitalized. The company was able to monetize significant amounts of equipment, which has contributed to consider goal.
Financial strength.
This has also made it possible for us to purchase more than 23% of our shares over the past 30 months, including 2 million shares repurchased in Q2.
Substantially all of the second quarter purchases were made in May and June as we started to see relatively less volatility.
The company continues to view share repurchases as good long term investment opportunity for the use of any excess capital.
Recent moderation of share repurchases is not a reflection of our view on the company's value, but rather a desire to maintain strong liquidity in order to navigate these unprecedented near term market conditions and to have capital available for opportunities that may arise.
Approximately 23% over allotment under the RNC I'd be program remains which corresponds to the approximate 17% of time remaining teller NC I'd be expires at the end of September.
I'll now turn the call over to Dale who will be providing comments on our operating conditions and strategic outlook.
Thanks, Rob.
As we noted in our last conference call, we have implemented a number of procedures in the field at office to ensure the safety of all of our staff and thus far we have had no cases of cold midnight team and our company.
Although activity continues to be lower year over year, the safety protocols, we implemented in our field operations to protect our people and our customers for contract in the virus has allowed us to continue to perform job safely and successfully.
Additionally, all support functions continue to operate effectively from offices remote operations, allowing us to continue with our business, while ensuring the safety safety of all of our people there and Thats pandemic.
These times are truly unparalleled our second quarter activity materialized as we unexpected which resulted in record revenue declines. However, we also applies the necessary cost reductions and significant business adaptations to allow us to navigate the company through this considerable in this industry slowdown.
Specifically we.
We have reduced our fracturing spent and 12 crude cogs and adjusted our fixed and overhead cost structures, which should result in 2020 fixed overhead best DNA levels, being 45 million far greater lower than when compared to 2019.
Additionally, the seasonal cost structure adjustments that we were implemented helped mitigate second quarter negative operating results, even before considering that positive effects of the Canadian emergency waves subsidy program.
This resulted in adjusted EBITDA seeing improvements relative to that adjusted EBITDA levels of the second quarter of 2019 before considering the effects of this federal waves subsidy program.
The third quarter has seen a sequential improvement in activity levels. Thus far in July we have been running pretty fracturing crews at good utilization levels for customers, who have committed there second half program so try cap.
Based on customer commitments.
And conversations we expect to see word for Threeq crews for the remainder of Q3, I'm, a monetary customer spending plans and adjust their fleet upwards. If we can achieve high utilization and maintain acceptable pricing on any fleet, we add back into the market.
Hi, spending services have seen improvements commensurate with the increase in western Canadian drilling rig out.
We have 10 primary centrex activated which compares to 20 in the first quarter.
So revenue will be affected by the lower industry activity levels. Additionally, we have undertaken suddenly media spending work in relation to the federal and provincial well abandonment programs.
Although the well abandonment program is not likely to be material to the overall business. This program will help offset some costs and keep some of our people working.
Our coil San Francisco will not recover the third quarter to the same levels as our process against spanning several slides. We have three three crews available that belief near term utilization will be low through the started the quarter with improvements toward the end of the quarter as activity was slightly trial, the wrap in drilling and completion work.
Pricing for pressure pumping services was competitive prior to entering this downturn.
For this reason, we do not anticipate further significant pricing pressures, we believe companies ballpark equipment, rather than electing to cannibalize their I'll market.
We intend to remain focused on working with our customers to improve daily pumping efficiencies, which were well reduce the cost.
Which will reduce their cost far more than what minor pricing concessions by partnering with US a number of clients are achieving pumping efficiencies of 20 to 22 hours per day with the recent achievement this past week, but what about clients.
Being 95% of the minutes a day.
We have operations teams within the company to move all of our clients to higher levels of helping efficiencies.
Which improves our clients costs and also generates more profit from our existing asset base.
The North American pressure pumping business remains competitive the companies that can improve efficiencies and offer low cost save service well retain the best customers, while generating the best rate relative returns for our shareholders.
Price of natural gas in Western Canada has remained high relative to last year and most of our third quarter activity will be driven by natural gas and liquids rich natural gas activity.
Customers cash flow and liquids rich gas wells has improved significantly however, most clients electing for continued stability at commodity prices.
Stained impediments that global oil and gas demand before committing to increases in their second half work programs.
Cash flow generation buyer oil produced at clients has also improved but it has not yet at a level, whether there will be meaningful increase in oil related drilling activity.
While we do not anticipate that these cash flow improvements will add significant work in the third quarter. We are encouraged by our customers improved economics. If these price improvements all that will eventually translate into an increase in Alaska today that activity.
Our company's cost structure was already much improved heading into this downturn and we've already made the necessary cost reductions to adapt to this new market.
We believe that a number of our fixed cost reductions will result in permanent improvements to our cost structure, which will will be sustainable and will substantially benefit our competition coming out of this downturn.
Additionally, we continue to make efficiency gains throughout our organization.
In particular, we have a number of lean six sigma projects underway that will lower our cost through automation component life management.
Data tracking tractor less fracturing increased efficiency in our operations and as previously discussed better pumping efficiency on location.
Despite all of the market uncertainty strong balance sheet, Rob noted will allow our top they continue to invest in that pursuit permanent business improvements.
Cost reductions we have made today combined with increased level of activity in the second half and emergency wage sub sea should provide enough cash flow to cover the necessary to standing expenditures.
2020.
So 2015, we have made a conscious effort to significantly deleverage and restructure our business and we and we have remained focused on our course drags in our car market a big reason for the focused on returning funds try balance sheets are debt repayments and share buybacks was in response to our strict economic hurdle threshold.
As for our investments.
These thresholds helped ensure we did not continue to pursue a strategy a further overcapitalized, saying in an already overcapitalized dentistry.
This discipline now uniquely positions tied to add to emerge from the severe downturn in a position of significant stacked.
On June Thirtyth, we had no bank debt with cash on the balance sheet.
This position is relatively unique in our industry, which will allow the company look seriously at several investment opportunities.
However, we will not copper bought compromise our investment return requirements as returning funds to the balance sheet through our share buyback remains a strong alternative investment opportunity.
We anticipate that I like the downturn that began in 2014 there'll be significant fracturing equipment attrition within the industry. Since equipment is all they're more likely to be retire that brought back into service. After this downturn.
Competitors are also bar distressed.
The ability to replenish anyplace equipment will be significantly diminished from any of the industry, which will play some organizations and positions of relative strength I provide the potential opportunity to improved business performance.
Said variably coming out of this incredibly challenging market.
Despite these market challenges our primary goals for 2020 remain consistent with those we presented previously.
First we will continue to focus on how to top quartile returns that are sector by increasing the returns of our card business lines, starting utilization and permanently lower cost structure.
Well improve the ROI c., we generated from our active equipment.
We will continue to pursue opportunities to generate five subpart equipment are idle assets that no longer to be used in Canada.
Maintaining a healthy balance sheet is still a top priority. We will continue to evaluate returning capital to our shareholders through ANSI IB program, while monitoring cash flow from operations and not compromising our financial stack.
Our strong financial position allows affords us the flexibility to evaluate investment opportunities that may permanently changed the industries, such as funding cost reducing technologies and programs.
This ensures we could continue to improve our efficiency and cost structure at a highly competitive market.
At the same time, we will also be able to explore investments at our existing business potentially new service lines that yield short term financial returns combined with long term improve return on invested capital for the company.
This will be my last conference call. After 24 years have tried CAD 11 years as CEO I'm retiring at the end of August at which time, Bradford or it will take off risk President and CEO I take comfort in knowing that I'm, leaving the company and excellent financial position and with a strong leadership team I believe it is the right time for me to step down.
Personal standpoint, as well so right time for Brad to step into leaves the company.
I've been with try Kansas day, one and I've seen a growth from a small regional spending company to the largest pressure pumping company in Canada and it made a tremendous amount of hadn't have met a tremendous amount of great people along the way.
I want to thank all of our current staff and my top colleagues for their hard work.
Our commitment to safety and customer service passion and pride and the company I will Miss all of you and hope to stay in touch.
I want to thank our customers for their loyalty to try Karen during both the up and the down cycles of our industry majority of our clients a long term partner has with us that have made a huge part of our success.
I'd also want to thank Dallas investors that have worked with amount over the years I've enjoyed our conversations the insight provided.
Chips I have made and thank you for your commitment to the company.
Thank you for your attention today, and your interest and try Ken and I like to turn the call backs the operator Freddie question.
Thank you well now begin the question and answer session to join the question can you May Press Star then one on your telephone keypad, you will hear a tone acknowledging you are request. If you are using a speakerphone. Please pick up your handset before pressing any keith.
To withdraw your question. Please press Star then too.
Well, we'll pause for a moment as callers join the queue.
Our first question comes from Keith Mackay with RBC. Please go ahead.
Hi, good morning, Thanks for thanks for taking my questions.
Thanks.
Good to talk to you.
Yes, so just maybe to start off.
Q3, looking a tiny bit better on the revenue side based on rig count and activity.
How should we be thinking about incremental margins in Q3, given that that bumpy and activity plus the plus the permanent cost savings you've mentioned.
I mean, I I think as sort of Dale outlook by outlined in his commentary that we want to get to a place where we're generating a little bit of cash and when factoring in the subsidy enough to cover sustaining capital is kind of what we're thinking so that's that's really the decrements on the on the margins.
Got you, okay and on that wage subsidy you have a rough guess for what you might expect to receive will mean last half of the year.
I mean, Q twos, a good proxy, we're just kind of evaluating some of the new changes to the program, but but Q twos, a good proxy for for the remainder breach successive quarter.
Okay.
And working capital should we be thinking about a inflow or an outflow for the for the rest of the year and maybe it'll take yes.
It will be a little bit of investment.
In working capital but.
It's not going to you.
Good chance, we can keep it under the.
Debt pounds at zero.
Yes.
Understood and one one final one you mentioned generate enough cash to maintain equipment and opportunistic investments.
Is this more more in your existing fleet in additional efficiency gains or should we be thinking potentially about new business lines either related to your current business lines or or or new segments of the of the market altogether.
Yeah, what we've kind of consistently said that we're going to invest in our existing services their improved haven't so that would be.
This point in time, it's really small incremental investments that will continue to make in the second half a year that are getting in front of efficiencies.
They're going to lower our cost structure or make us more competitive on location and we do have some investments there that that would go to make in terms of expanding the business. I mean, we do look at every opportunity that comes across both within our service lines as well as outside of our service lines and our strategy as much as saying that if if we believe.
We could strengthen our existing service lines through acquisitions, our business opportunities than we would but it's very much dependent in today's world on not not hurting the balance sheet and also generating.
Having the right purchase price and generated in the right amount of financial returns from it.
We do look at other service lines and we'll continue to US strategically we've always said that we'd like to get some obvious other service lies in the company, but I would I would say that.
From a priority standpoint.
It would be a little bit farther down the list.
Understood Okay, well, thanks very much for for taking my questions that you about docket, yes.
Our next question comes from Waqar Syed with HCV capital markets. Please go ahead.
Thank you for taking my question, but first and Dan I have one do they should the best as you start the next phase and.
I want to thank you for your friendship put all these years.
I've always.
Valued your commentary and you've been Mike go to Encyclopedia.
For any technical knowledge as it relates to pumping. So again. Thank you. Please send ship and best of so best of flat can you over the next phase.
Thank you. Thanks for the comments retired likewise appreciate appreciate a keeping in touch with your going far too.
Sam had thanks.
Just my question more broadly most strategic question.
You mentioned about this job there you pump, 94% off of a minute could you talk about that that job. We know what what was done differently that caused that kind of efficiency improvement and number two is it easy you can best be replicated.
And in a more general way and then what does it.
How does that impact demand.
At peak began to see us kind of efficiency improvements.
Demand in Canada with long term, even if overall its completion activity goes up.
Yes, so on the on the efficiency side of it. So this and say this is work with a long term Clive where we work really closely what the clients and so we can't achieved 94% efficiency without the client being.
Extremely tied to us in terms of sad delivery water delivery all the other services that are provided on location being really in sync with us as well and so.
I would say that getting to this level of efficiency is very much in incremental exercise up a number of little things rather than one big thing and a little things.
As I mentioned are on the client side, but from the Tri County side of things. It's it's basically switching between Wow, So weve developed.
For those of you that are familiar with the lean six Sigma project, we've gone through the whole process.
You bet and evaluated every single step that takes place and allow switch and by doing that you can streamline your process and essentially eliminated all the necessary steps and not quite a few minutes out of out of while switching and we've been able to do dot unemployment that with our clients, yes maintenance procedures that.
Allow us to maintain equipment offline. So that we don't have to shut down the job at all to maintain a quite that it is.
It is san delivery and and ensuring that your sand there's no sand.
Holdups or anything like that so I think in general it's a it's a lot a little things.
We were trying some new technology on the back end of our pumps.
With hoses, rather than ironed out actually.
Helps a lot more with the rig up but also as a little bit more efficient and it we got less vibration on our equipment and so we're seeing a little less wear and tear there and we're going to be investing and more whos technology in the second half of this year as well and so.
Number of of smaller things that exhibit two to one big thing.
And in terms of it affecting utilization on an overall basin basis as we move all of our clients, they're absolutely it's going to affect things, but if you looked at our our average clients are still still haven't quite a bit of impediment to make they'd be.
More than that 14 hours a day efficiency and.
On an average and then try cat and we have to continuing to move them up.
It's about 20 to 22, but if we can work really closely with clients. We can get most clients in that range and I think just to sort of close the loop on the industry and how that affects the long term demand.
Absolutely efficiencies are going to.
Effect or sort of the effect the supply of equipment.
Sort of counteracting that is I think as Dayl mentioned in his prepared remarks, just the fact that we expect to see.
Fair amount of attrition out of the market as well in Canada because of the.
You know everything going on in some of the equipment is getting old unfairly use so theres kind of a balance there, but but absolutely efficiencies do drive a little bit of the.
Increase effective increase in supply, but but I think it's.
As we look at our industry model, we do see that some of that demand may may get counterbalanced.
I think to Rob's 0.2 or cards.
I mean equipment has to be really well maintain to achieve these high utilization in and if it's all or.
Not very well maintained equipment or or equipment that can continuously pop that's that's going to be an issue. So I believe that as Rob said that as you drive these high efficiencies you're going to weed out quite a bit of equipment from the market. So the supply side probably comes down.
Quite a bit if we continue to head in this direction.
No. This was like us what in the U.S. declining simultaneous Fracs Smith.
Due to wet as being fact right at the same time at low rates.
Yeah, No we haven't done a lot of simultaneous fracturing in Canada, yet I suspect it will be coming with certain clients at the moment, where the majority of the work we would do would be.
Zipper or single well fracs.
Okay and that follow followed with other ones.
Okay, and then could you talk about the supply costs.
The stabilized and did that come down the second quarter and how do you see those kind of trending going forward.
Hi, what cards like Baldwin.
We did see some some pricing improvements on on Frac sand and some of our other inputs chemicals and that type of thing I, probably characterize those more as kind of one off opportunities.
We aren't seeing any pricing increases, but at the same time.
There's not a lot of opportunity you see pricing declines either so I think on a go forward basis.
Generally I think we'll still see some of those one off improvements coming in.
But.
I would say the run rate is probably pretty similar to what we saw to into Q2 for the remainder of the year think the big area that we've we've seen the most cost.
Improvement has been on the repairs and maintenance side of things.
We've been very focused on.
Maintaining or active equipment, but doing in a very cost effective way and we've seen that have a step change and what our costs are on that front. So again, it's still relatively confident that we'll be able to continue that trend on a go forward basis.
And given that this supply demand dynamics that right now.
All of those savings whether thats out there.
It wasn't maintenance or other input costs.
Being passed onto the consumer or service company, they look to retain some of that.
Yes, so if you kind of if you looked at our work scope with our our current clients I would say that were passing on.
Most of our savings on saddened and and things like that and that were retaining savings that we have internally on efficiencies and cost though.
As Mike alluded too, if I repair and maintenance costs.
Our lower than we're able to retain that but product product sales on the big products item, South where it and this market where passing that onto our clients and that's allowed us to keep our margins relatively stable with our current clients from our side of it.
While they still get some benefit from this downturn on San costs, and a few chemical costs and fuel costs and things like that.
Great. Thank you very much.
Thank you.
Once again, if you have a question. Please press Star then one.
It looks like we have no other there's another question side.
Our next question comes from John Gibson with BMO capital markets. Please go ahead.
Morning, guys.
Just following on cars questions there how much horsepower on the basis and you think is actually able to move to sort of the 22 hours per day range.
With these types of Frac see more prevalent in the montney different areas or.
Are you expecting them to be done.
While the conventional plays like the Viking and Cardium.
Yes.
I can't really to comment on everyone else's horsepower. So they don't all lot quality, but I think every company will have.
No.
So most companies are probably some some capacity that can move to that level.
In terms of the areas, where you could do it.
Yes.
Andy do M&A is where we're seeing the success right now, but quite honestly you could.
We apply this Sunday.
Our our previous best deficiencies rehab or actually in the southern part of the province, and East M&A failed still do and I fail, but some of the oil work, we're doing down there and so you can apply it everywhere, it's not really limited to the formation, but where we're seeing that.
We're seeing the best efficiency right now is a large pads, we're working really closely with the client you're out there for.
Part of six weeks and you just continually improve every day.
Okay, great. Thanks second one from me on the cost reduction side can you identify a percentage or dollar amount or how much of them are actually going to be permanent and welcome back when activity levels.
We haven't I wouldn't say, we've completely pinned down that permanent.
Nature of all the cost reductions just given how quick things have come and how fast the activities come down, but I would say a vast majority of the cost reductions would be more permanent.
In nature.
If I had to hazard, a guess I'd say three quarters and that give backs are going to be more things when you get back to a world, where you've got things like profit sharing et cetera.
That's that's.
The reality I think we've we've done a lot in the last.
Few years on process systems et cetera that have vastly improved durability due to scale up the business. So I think we can maintain a vast majority.
Okay great.
Last one from me just how you're sort of existing level of three crews what level of utilization you think you need to achieve.
To get to sort of breakeven EBITDA net or the way subsidy.
Sorry.
The utilization on the crews so I would say I would say that were pretty well there with with what were we run and we normally what target 70% to 80% utilization on a crew.
Yeah like I I think you were targeting that 70% to 80%, whether we kind of get.
Get fully there and audit it will be.
It's probably going to be in the 60% range I would I would think it's going to be a little bit more choppy here through the third quarter.
So we will monitor pretty closely and.
And that kind of thing just just to see how things are going the reality is what we've done from a business perspective is weve retained or immerse most senior personnel and are adopting the crews with.
And adding to them, if we need with junior personnel.
To to move that crew count up and down to kind of flex up and down a little bit through these chopping times.
Okay, great. Thanks, a lot and congrats on your retirement wishing you all the best in the future.
Yeah. Thank you.
Our next question comes from Jeff Fetterly with Peters and company. Please go ahead.
Morning, guys.
Morning.
As shown on Q4, you talked to both the visibility you have for Q3, but what are you seeing for Q4 or what are your expectations for activity and utilization in Q4.
The three crews that we're running I should continue through Q4, I'd say, we've got good.
Good customer visibility with our current clients all the way to the under there and then as we mentioned.
And I have said.
Got it qualitatively and my prepared remarks, I would say that liquids rich gas clients. The economics are quite good.
Now mens and so they're not going adding to their program just yet, but but were encouraged by what we're seeing on the economics of their encourage.
I'd say positively.
Looking at things. So is there there's potential to add equipment backend and Q4, but we have to kind of see those plans get developed and as much as anything our clients are looking for some stability.
Want to see how the second wave and pulled that plays out in the world. They want to see if commodity prices are going to halt, but if we get some stability I think theres.
There is going to be.
Some clients that will begin to be looking out a static programs at some point in time.
Any expansion to the programs to solidify the utilization for the three crews or could trigger an incremental crew or more capacity coming to work.
It's probably combination of both the just firms up some of the where there may be small gaps and stuff like that plus there is again as I mentioned.
That we've got a lot of the senior personnel that we just sort of reallocation and bottom up.
To form another crew, if we need to.
And any incremental activity you expect to could come in Q4 or realistically is it more of a winter phenomenon.
Hi, I'd say the earliest reinstate as mid September.
I was with a little better than the rest would be in October.
Just a clarification question on cost structures to your reference to the 45 million of annualized savings compared to 2019.
How much of that would have been realized in the second quarter.
Or in the second half of this year and like you would you expect that the 45 will fully show up this year.
Yeah that sorry that if weve confused that is the absolute dollar amount. That's that's come out in night or 20 relative or were expecting to come out in 2020 relative to 2019 cost structures.
So that is.
Obviously, a majority is weighted to the Q2 timeframe and beyond.
But the but the absolute dollar change in your cost structure. This year should be about 45 million.
Yep.
So if we saw that both the annualized impact in 2021 would it be much more or different than that 45.
I think it should be more.
Other than that sort of commentary.
That I made again just on the last one where if you get back to a world, where you actually thinking about profit sharing and things like that.
Jeff.
That would be the.
That would be the counterbalance to some of those.
Back a little bit.
Okay. Thanks are up.
[laughter] I was touch and what are the risk pocket.
Great. Thanks for the color Bill Best of luck in the next chapter stay in touch.
You bet you to appreciate all the years.
There are no more questioners in Q.
This concludes the question answer session I would like to turn the conference back over to Dell Duster hopped for any closing remarks.
Oh normally I'd say I look forward to talk to your next quarter, but other care to do that today. So a lot I wish you all well Rob will be here to talk to you for next quarter.
And I have a great rest of this summer looking for it.
We are interested tried that going forward. Thanks.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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