Q2 2020 Encore Wire Corp Earnings Call
Well, yeah quite aware.
Or second quarter results conference call.
My name feature and then I'll be your operator for today's call.
At this time all participants are in listen only mode. Later, we'll conduct question answer session.
And the question answer session. If you have a question. Please press Star then one and you touched on phone. Please note. This conference call is being recorded I'm not sure Daniel Jones, Sir you may begin.
Thank you Adrian and good morning, and welcome to the Encore Wire Corporation quarterly conference call.
Daniel Jones, President CEO, and chairman of the board of Encore wire with me. This morning, as Bret Eckert, our Chief Financial Officer.
Thank you for joining us on the call and for your interest and encore wire.
We appreciate your continued investment in support during these uncertain times.
Health and safety of our employees and their families.
Remains our top priority, we're following CDC guidelines and maintaining shakes working conditions.
Very proud that some of the products, we manufacture or being utilized to power to break buildings and pop up medical facilities.
Finally commscope not.
Our distributors rain very thankful that we continue to serve during this critical time.
Despite the economic challenges we're facing in this country. The strong earnings posted in the second quarter ended June 32020.
Attest to the ability of our business model to succeed in both good times in bad.
We continue to increase the strength of our balance sheet ending with over $250 million of cash on hand at June 30 to fund future growth.
I'm very proud of how our employees are responding to the current crashes, allowing us to main maintain and remain fully operational.
To serve our customers and drive value for our shareholders. In addition, our one location model allowed us the agility and flexibility to adapt to the changing market conditions during the quarter.
There are some key items to note copper unit volumes decreased 12.7% on a sequential quarter basis as parts of the country shut down job sites or significantly curtailed construction activity in response to the pandemic, leaving some customers I'm able to receive deliver.
As for our products during the second quarter.
Comex copper prices experienced a steady rise throughout the second quarter, while copper spreads decreased 5.8% on a comparative quarter basis.
Copper spreads tightened in the quarter due to the economic strain on our customers in our decision to balance volume and price.
With that said the gross profit percentage increased for both the second quarter in six months ended June 32020, compared to the same periods in 2019, highlighting the strength of our business model.
Aluminum wire represented 10.1% of our net sales in the second quarter of 2020.
Beginning late in the second quarter, we experienced a renewed optimism from our customers as order volumes have started to normalize all states reopen for construction.
Looking ahead, the duration severity of the Koeppen 19 outbreak in its long term impact on our business are uncertain at this time.
Developments surrounding the Cobot 19 global pandemic are changing daily we've limited visibility into extent, which market demand for our products as well as sector manufacturing and distribution capacity will be impacted.
We believe encore wire is well positioned to weather the storm and we'll continue to serve the markets. During this critical time.
As we navigate near term challenges, we remain focused on the long term opportunities for our business. We believe that our superior order fill rates continue to enhance our competitive position.
As orders come in from electrical contractors, our distributors can continue to depend on us for quick delivery East coast to coast.
I'll now turn the call over to Brett to cover our financial results Brett.
Thank you Daniel in a minute, we will review encores financial results for the second quarter and six months ended June Thirtyth 2020.
After the financial review, we will take any questions. You may have before we review the financials. Let me indicate that throughout this conference call. We will be make we may be making certain statements that might be considered to be forward looking in order to comply with certain securities legislation and instead of attempting to identify each particular statement as for.
We're looking we advise you that all such statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed today.
I refer each of you to the Companys FCC reports and news releases for a more detailed discussion of these risks and uncertainties also reconciliations of non-GAAP financial measures discussed during this conference call to the most directly comparable financial measures presented in accordance with GAAP included EBIT da.
Which we believed to be useful supplemental information for investors are posted on our website.
Net sales for the second quarter ended June Thirtyth 2020 were 253.6 man compared to 336.9 billion.
Hey, there Adrian.
Compared to 253.6 vein.
I'll start over net sales for the second quarter ended June Thirtyth 2020 were 253.6 million compared to 336.9 billion for the second quarter of 2019.
Copper unit volume.
Measured in pounds of copper contained in the wires sold decreased 18.6% and the second quarter 2020 versus the second quarter 2019.
This unit volume decrease was due to covert 19 related economics train as parts of the country shutdown job sites or curtail construction activity in response to the pandemic, leaving some customers unable to receive deliveries of our products during the quarter.
This coupled with uncertainty in the market resulted in reduced in sporadic customer buying patterns are at April may and part of June 2020.
Beginning late in the second quarter, driven by the reopening of many state and local economies customer buying patterns begin to return to more historical levels.
Gross profit percentage for the second quarter of 2020 was 14.4% compared to 13.6% in the second quarter of 2019.
The average selling price of wire per copper pound sold decreased 9.5% and the second quarter 2020 versus the second quarter of 2019, while the average cost of copper per pound purchase decreased 11.4%.
Net income for the second quarter 2020 was 12.3 million versus 17.8 million in the second quarter of 2019.
Fully diluted net earnings per common share were 60 cents in the second quarter of 2020 versus 85 cents in the second quarter of 2019.
Net sales for the six month ended June Thirtyth, 2020 were 556.4 million compared to $651.6 million during the same period in 2019.
Copper unit volume measured in pounds of copper contained in the wire sold decreased 9.2% in the six months ended June 32020 versus the six month ended June Thirtyth 2019.
Gross profit percentage for the six month ended June Thirtyth, 2020 was 14.8% compared to 13.4% during the same period and seen that 2019.
The average selling price of wire per copper pound sold decreased 7.4% in the six months ended June Thirtyth 2020 versus the six month ended June 2019, while the average cost of copper per pound per exists decreased 9.6%.
Net income for the six months ended June Thirtyth, 2020 was $31 million versus 31.2 million in the same period in 2019.
Fully diluted net earnings per common share were $1.50 in the six month ended June Thirtyth 2020 versus $1.49 in the same period in 2019.
Looking on a sequential quarter comparison net sales for the second quarter 2020 were 253.6 million versus $302.8 million during the first quarter of 2020.
Sales dollars decrease due to a 12.7% unit volume decrease of copper building wire sold combined with a 5.6% decrease in the average selling price per pound of copper wire sold on a sequential quarter comparison.
Gross profit percentage for the second quarter of 2020 was 14.4% compared to 15.1% in the first quarter of 2020.
Copper wire sales prices decreased 5.6%, while the price of copper purchase decreased 3.9%.
Net income for the second quarter of 2020 was 12 point Threemillion versus 18.6 million in first quarter of 2020.
Fully diluted net income per common share with 60 cents in the second quarter of 2020 versus 89 cents in the first quarter of 2020.
Our balance sheet remains very strong we have no long term debt and our revolving line of credit is paid down to zero. In addition, we had 250.4 million in cash at quarter end, which is an increase of 43.6 million during the quarter.
During the first six months of 2020, we repurchased 441250 shares in the open market. We also declared a two said cash dividends during the quarter.
Our recently announced two phase expansion plans are well underway.
We reaffirm our previously announced capital expenditure ranges of 85 to 95 main in 2000 2070 to 90 main at 2021 and 60 to 80 million in 2022.
Our strong balance sheet and ability to consistently generate high levels of operating cash flow should provide ample allowance to fund planned capital expenditures a replay of this conference call will be accessible and the investors section of our website.
I'll now turn to fall over the Daniel for a few final remarks.
Thank you Brett.
As highlighted encore performed well in the second quarter and six months ended June 32020.
Our low cost structure, one location model and strong balance sheet enabled us to withstand difficult periods and the vast.
And they're continuing to prove valuable now.
We believe we are well positioned going into the second half of 2020.
As this country navigate this global pandemic.
I'm very proud of how each of our employees of rally during this crisis and I want to thank our employees and associates for their tremendous efforts. We also think our stockholders for their continued support.
Adrian will now take questions from our listeners.
Thank you well now begin the question answer session.
A question. Please press Star then one on your touched on phone.
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And our first question comes from Brett.
D.A. Davidson your line is open.
Hey, Thank you good morning.
Good morning, Brett.
Brian how are you.
Well thank you.
Daniel.
The volume down 19%.
I was hoping you could just comment again and how that has progressed through the quarter I already talked actors in the construction industry with Didnt feel like a down 19% kind of volume environment.
I'm just trying to understand what you think reflects for short term project, a razor pure demand destruction or even any sort of competitive market share changes.
Yep.
That was a mouthful Brent.
Hello.
Yes.
Enter three parts of your question.
On the market share piece to go start at the store to last and go backwards.
On the market share piece, we feel like that.
We made strides in actually gained in some areas.
Without me into specific.
With.
Brand names or whatever but we definitely picked up.
Some share in certain areas.
As we disclosed in the press release, there were some areas across the country that.
States had shut down some of the construction sites early on in the quarter.
Combined the answer for two parts of your question.
Early in the quarter.
We had some challenges with.
Getting the trucks in and out.
The way that we would have liked.
The truckers were reluctant to go into certain areas where.
There they were concerned about.
Being able to stop in U.S.
Public showers and.
There.
Restaurants were closed I mean.
There were just lots of issues early in the quarter and uncertainties.
It picked up a little bit.
In the middle of the quarter, and then dropped back off is for as the availability.
Of equipment and as we got into.
June.
Things started to kind of normalize if you will.
There were labor issues.
You wouldn't think that it would be difficult to ramp back up.
With with hiring people, but.
The real issues as far as getting.
Hi, good help in.
Yeah.
Hiring was huge issue as we started back up.
Employment rate certainly doesn't support that but.
The feedback we were getting was.
Some of the folks that had.
Left with whatever reason to get those folks back.
They felt that they were making enough money.
Sitting at home.
You know to pay the bills in some fashion. So we really had a hard time getting folks back in and back to work as June started to normalize.
Okay.
And how much yet.
When you look at that that volume in the quarter.
How much the associate with things within the energy sector.
Or products that.
Yeah, we're might might be more associated with that sector.
Yes, there were there were some shipments involved in some pretty large projects.
And.
Many projects actually in several different phases of the construction side and.
As we've stated in the past the timing of when our product enters into that construction cycle.
Is typically well past the financial piece and so.
There were some projects put on hold there were some phases of projects that were put on hold early in the quarter.
And basically turned back on with some sense of urgency in the latter part of the quarter.
You know significant amount of.
The demand for the product was pushed.
Even outside of.
Late June.
In the current months so.
That specific product it goes into.
The energy sector was definitely pushed aside for a little bit.
And then the projects depending on what phase they were in some ramp back up towards the end of the month.
Okay, but nothing material to like the upstream side Daniel.
Nothing material that canceled.
And the activity.
You know on some of those projects continues.
Amortization, you're still continuing.
We're still having discussions about.
Which phase.
Next in whatever so it's it's actually moving okay. It's not great it's really good.
And again, it feels more normal the bigger issue.
Has been.
The labor piece getting folks back to work to get the stuff shipped out that kind of thing was a bigger challenge in the quarter.
I'm trying not speak too much about Q3, yet but.
The real issue more than anything was when the jobs turned back on.
Beating that stuff.
Shipped and Offloaded at the other end.
That was to challenge for sure quarter.
Okay last last one for me and I'll get back into the right.
Bigger almost kind of a bigger picture question, Daniel which is I look at your career path sale, you down 15% year on year, Aladdin extraordinary things going on but your gross margins are up like a 100 basis points. So.
I guess im curious kind of what what about that you think you controlled cost perspective, I know you've got movement in commodity prices that influence all that but again I just kind of wondering what's been within your control and managing these costs.
Top revenue environment.
Yes, there's a great question I mean, we really were.
There's a lot of uncertainties going into Q2.
And we really focused on the cash side and making certain that if we took an order and.
We could ship it they could receive it and we were more importantly, we were going to get paid on time.
As that starts to kind of unfold during the quarter.
We were managing.
The order intake.
In the direction to make certain that you know.
We were going to hit those.
Points, we wanted to be able to ship that we wanted them to be able to receive it we wanted to get paid and that may sound really simple, but that was the top three concerns that we had.
Along with making certain that our folks that were working here, we're performing in a very safe manner with the social distancing in the face covering basically from day, one so in that respect.
Brent we were managing the heck out of every single order.
Every quote everything that came through the door.
Super aggressive on the cost side Super aggressive dresses on managing.
Risk side and.
We wanted to make certain that those things were going to happen before we said yes.
Okay. Thank you guys appreciate it.
You bet.
And are now next question comes Tim.
Finally, our Americas Sidoti and company your line is open.
Hey, good morning, I Hope you all are well.
How are you.
Im good. Thanks, So I wanted to stay on that same topic of gross profit.
Your gross profit dollars held up better than I expected given the pullback in the spread.
And you didn't have lower volumes as well so.
Can you maybe talk about or give us a refresher on some of the secondary gross profit drivers in the business and.
Just any color into.
Which ones maybe outperforming at the moment.
Hi, good I'll grab that one Julio I mean, we kind of touched and Thats really yeah. This one location model as we said really gave us the agility and the flexibility to real time adapt to changing market conditions in the quarter I think the biggest driver and that is the labor component of it right we run a.
Lean organization that we flex up and down and.
We're very cost conscious as we navigate through this.
Given the uncertainty the sporadic buying pattern in the sporadic nature of the sales and the volume in the purchases and so just a very close to the business and navigating through those costs I think the measure of a lot of companies coming out of this is is how strong as their balance sheet and what are they learn going through.
This to make them better and I think thats going to be big measure for us as well I think the team did a phenomenal job of being very conscious of costs and making sure that that we're matching that with the volume that was going out the door.
Okay, that's helpful and.
On on pricing right.
So comex kind of trended upward throughout the quarter, but it really seem to have taken to out of an acceleration in June and through July.
Can you maybe just talk about kind of pricing trends, how you're able to kind of stay ahead of that on the pricing side and.
Would you maybe characterize that dynamic.
How would you characterize that dynamic today.
Yes. Good question good point.
First time and many quarters that you can see the low for the quarter was April 1st in the high was June 30. So.
Our the into June June 28, I think when its stock trading so.
If you look at the 52 set.
Swing from the beginning of the quarter literally to the ended the quarter.
We were constantly.
In the industry was constantly putting.
Hi sheets price increases.
Out in front of the increase.
The one of the differences that you were able to see in showed up in our profit margin was.
We're very disciplined when it comes to the pricing scenario.
When you have copper on a bias or trend.
Three months is now the trend I guess.
That discipline clearly will show up.
Enforces the industry to have discipline.
The cost of goods sold piece the copper represents.
The lowest it's been is 50, some odd percent hostage spend is in the mid eighties as a percent of cost of goods sold in that fluctuates.
Pre violently at times and so.
You might have a little gamesmanship.
Early.
With people thinking that theyre going to get ahead.
We'll have a lack of something or.
Drop or they don't believe that the increase in the metal cost is real but when it happens you know.
First of the quarter through the end of the quarter on a consistent basis it forces discipline.
By all of them.
Everyone that we compete with and so we saw that.
We're really good at.
Our pricing strategy and we're really good at.
Enforcing those price increases.
When they're announced and when we say were up were up and I guess, that's the best way to put it.
Got it.
Cash flow is really strong in the quarter.
Can you maybe just talk about what your Crystal Ball tells you about working capital trends in the second half.
Yeah, Hey, good question I mean, it was very strong in the quarter little bit was timing with the share repurchase its purchase that occurred very late in the first quarter.
But you know Weve AOS, all we've had very strong operating cash flow I don't see this year is being any different with over 250 man on the books.
You look at our capital expenditure ranges 85 to 95. This year 70 to 90, and then 60 to 80 in 2021.
I think the trend you've seen of that cash flow generation Ofer historical period of last couple of years is we're well positioned to continue that this year. So despite the spend will continue to have very strong balance sheet as strong cash balances become through this.
We were fortunate Julio also are the customer profile that we go after.
Our receivables are all correct as Bret mentioned.
Our customers did a fantastic job of honoring commitments and paying on time and.
Doing the things that.
That they feel like they need to do but.
Again.
There was uncertainty going into the quarter and.
So conservative approach here and there but for the most part.
We were focused on service piece and the safety of our folks and we.
We were able to get paid on time, and I think Thats, a testament to the quality of the customers were certainly.
Got it thanks for taking the questions all back in Q.
Thanks to everybody.
And next question comes from John Collyer from Oppenheimer. Your line is open.
Hi, good morning, its Oppenheimer occur how are you today.
John how are you.
Good. Thanks, just two questions quickly both center on a couple of years out so it may be too far, but given the environment we're in and.
The outlook, possibly for construction of a couple of years I'm wondering how you think about accelerating your capital.
Expenditure plan, if you have the opportunity and also sort of related to that that competitive position that you think you might be able to gain from doing that.
Thanks very much.
Yes, Thanks for question.
We're moving.
You know.
What feels like sometimes too slowly, but we're moving as fast as we can on the expansions that we can handle.
The construction.
Project in the equipment in the things that we're going through.
And the people to run it and the things that go along with our expansion is going along as we planned it.
It's a sizeable expansion at were under right now we've got some plans that are stacked up behind it that we haven't announced publicly.
Well.
Uh huh.
Thats great.
I hope that's Johnstone, so, yes, sorry about that.
That's okay, yes, we like it and so.
Hopefully their shareholder.
As we [laughter].
As we move on through the expansion.
We don't want to go too quickly.
Done that in the past rather do it at the right pace and Thats, where were moving right now, but we do have.
Hi, going pretty well.
There is some.
A couple of different.
No.
Topics that we havent.
I'm just trying to be super careful with the John because of all who is on the call, but you look at what we have in front of us as far as opportunities in the market that we currently serve.
And then some fringe ideas.
That still will be the same profile of customer basically.
The peculiarity should have been identified.
That we want to do business with.
It's moving at the rate that we want it to.
It's kind of falling into place how that shakes out and exact market share number.
It's hard to tell because we have.
We had 30, some odd competitors over the years and you were probably down to something less than 10, so as the market kind of moves.
We're going to continue to expand on the property and the campus that we have here.
The current plan is rushed to you know.
Start from scratch and build the buildings and bring the equipment in.
In some of its pretty expensive as you can imagine but for the most part it's more of the same the growth patterns there.
We feel that the market's receptive we think we know what we're doing we think we've got a good handle on how to get there and it's moving along and I hate to be that vague, but.
Okay.
I can't give you too many details a name names at this point.
No that's great I appreciate very much.
Yes, Sir.
And our next question comes from Bill Baldwin.
Baldwin Anthony.
Yes. Thank you good morning, Daniel and Brett.
[music].
Couple of housekeeping items here to begin with.
Brett was there any LIFO impact on the quarter.
Yes, Bill good question it was small about 750000.
Increased to toss the sales in the quarter.
But pretty flat out.
Right Okay.
And secondly, when you talk about spreads change in a baby said 565 ages that year over year or is that sequential.
And even more offers right.
Yeah really we've got all three in the press release, and so we'll talk about a quarter over quarter six months over six months and then second quarter over first quarter. So I think Daniel referred to some that think burst sequential.
But.
We cover all three of them in the press release.
I'd say that the press release on a year over year spreads for the Q2 did I Miss it.
But that number Brad a year over year change and spread.
Was that came here.
So if you look on a quarter to date to quarter to date basis.
The.
So what we get we went through it I get that he has built separately and what we quoted and here is the decrease in the.
Price per copper pound sold of seven four right right you did there, but I didn't see the spread which is normally in the garbage on a quarterly release of ordinary this time I don't believe our Q2.
So for this other spread never you did talk about where Q on Q2, then is that correct.
So I think that month base that spread it down 2.9.
Okay.
Well.
If you don't mind.
Okay back Ricky I get the quarter to quarter spreads.
Yes.
Right.
The second quarter second quarter spread is the one that was down five eight.
And while I was year over year that was year over year, well five eight was up quarter over quarter, So for a second quarter.
And it was to nine six month 26 months 19.
Also in five eight was Q2 versus.
20 rescue to.
2019, Okay correct.
[music].
Daniel can you offer any insights there the did the spreads a little alumina business. So they cannot recover back to.
Levels are early on and when you had to deliver operation apparatus going back several years before all the import competition et cetera.
They're not quite back where we want them, yet bill, but they are better.
Okay.
And when you talked about labor issues are higher labor that was third party labor that really what in your own labor materials drop there wasn't that.
Yes, Sir included hours as well.
Right.
Yes, Sir April and May we were okay.
But in June.
You know hiring someone in Anaheim asking them to pass the drug test in doing the basic pre employment testing procedure.
Was quite a challenge to save leased and getting folks to come back that had.
We could not team we offered folks different reasons to be off if they felt you know.
They were at risk or whatever.
We let them we let them go live letting go home, we little go we didnt, we kept them but.
When we call to encourage them to come back to work they were.
Feeling as if the.
Money was good for them to stay home.
Robert does that imply than that there.
No longer receiving your health insurance that theyre off the payroll that if they don't respond and come back or how do you handle that.
That's correct, yes, that's correct.
They are off payroll.
For payroll, okay well.
Did that materially thank affect your shipments in the second quarter.
I think the ability to get folks hired and trained in whatever absolutely had an effect.
Yes.
On the dark.
Yeah.
Yes.
Yes.
I don't I don't.
Well not.
I don't know the exact percentage, but we really right I understand.
And that's still on the issue and when do you perceive as an issue going forward.
You know.
It was better in June the latter part of June was quite a bit better.
The quarter and.
It remains to be seen what happens I guess for.
Q3, but.
For certain for certain genetic defect in April and a little bit little bit it was better in may and.
Trended better in June versus May.
And.
As far as.
No.
You made comments in the past that.
Qualitative product, our comments not not quantitative or qualitative visa, indicating the outlook for that.
Sure I suspect it looks pretty good phase of that nature has that has that.
Visibility become a little bit more clear here going forward that it was going into the second quarter or.
It is still a pretty cloudy outlook right now as far as new construction projects.
You know activity in general and structure area.
Yes, absolutely there's there's of there's a there's a measurable.
Difference today versus going into Q2, you can see.
States or.
And everything that you see in the news has an effect theres still a few town or cities are towns, where there are some issues going on I don't think it's any secret that.
Portland's on day, 60, something 63 or four.
Having their issues, but in our vision reluctance fruit for trucks to go into areas.
Where they have to enter at night for whatever reason, but for the most part.
That's behind Us and things in June really cleared up.
The residential starts number.
You know I look I've said it publicly before I think a million to starch is to write number.
We're probably something underneath that rate right now.
Which makes me a little bullish.
Commercial side.
The folks that we see in.
We are getting into.
Job sites now as a little bit easier than it was travel has loosened up a little bit easier than it was so.
The outlook.
Is I think measurably more positive today and there's some more clarity than we had going into Q2.
Very good.
However from a product mix from a profitability standpoint, Daniel does it make any difference you, whether you're shipping nonres products projects or residential projects.
Is it pretty much the same profit profile.
In general the answer would be us in general if you go specifically, yes, you'd have to get really down into weeds to separate the difference today, but in general.
We as long as we're doing what we're supposed to and and selling.
And not getting Cherry picked for one product or the other.
We like to show it all bill.
Okay.
Very good good job and yes, Sir thanks for asking the questions.
Absolutely thanks the support.
Your next question comes to Chris Mccampbell ask me Hilltop Securities.
Good morning, guys.
Okay.
Often on shareholders since events Rigo days.
So.
Yeah, I think what are the things that have been struck by over the years is.
Just a stronger balance sheet you all have how good managers shell or in the business, especially when you've had.
Competitors from time to time that have been insane and the pricing is has been ridiculous but.
Yes, just from a 20000 square foot per square foot.
What level.
What would you also you could you could do with.
Standpoint, you've got ample capital you've got great cash flow and it seems like you can finance your your expansion.
What can you do to maximize shareholder value here, where you've got a two cents dividend.
Got a nominal buyback is there is there room to do something or do you just continue to see managing the business and it really doesn't matter how big the balance sheet cuts.
I'd say credit spread accurate here.
In the near term and I'd say that in the next one to three years I think the highest and best use is our capital expenditures and expansion, yes, the new service centers across the Street 720000 square feet that really opens up the bottom of the funnel right and allows us to get to expand with regard to our we commit to get everyday.
Now to hear in 24 hours to 100% complete and so having that capacity is going to help a lot and then re purpose in the existing distribution center, adding manufacturing capacity exactly where we want and I think as you look out. The next three years, two and a half years that really is the highest and best use of our cash at doesn't.
Clued about 35 to 45 million a maintenance capital on our existing facility.
As we navigate through that we'll continue to be opportunistic when we got close to book in the past you've you've seen it that are the market. We did 441000 shares repurchased in the first quarter, which little over $20 million not insignificant.
But we'll assess that I think coming out of that expansion and the growth recapture in connection with that and then determine based on where the balance sheets that what's the next best use.
Okay. Thanks.
Thanks, Chris.
And our last question comes from Brett Feldman from D.A. Davidson.
Hey, Daniel Brett I'll come work for your guys. If you need me.
Come on the perfect we add up.
Got to Portland.
The drugs for it.
Forklift come on breadth.
[laughter].
I just had a quick one for you.
So much stock over the last few months folks have been stuck at home just on the kind of the repair remodel environment.
Big box stores have been pretty busy can you just remind me where you're at with your big box business today, and how much of an emphasis that is square.
Yes.
We do very little in retail.
It it hovers around zero.
There's a history there with.
You know, we used to sell quite a bit of material to one of the large retail guidance and.
They were pretty quick too.
Theres lot of details to Brent.
Basically.
Bye.
I was in a meeting with one of their brand new.
Buyers for our product category after doing business with them for about 20 years.
Doing great things in.
He had some new ideas that just we're not in alignment with.
My values and that was the end of that.
No we have not re entered that market.
Since that meeting that's the best way to put it.
But there's opportunities there and we evaluate them on a continual basis and.
The minute that we can step in and service and make money.
I am interested I want I am not understand is getting larger and poor so.
If it's a profitable scenario for us.
We're.
Definitely interested in taking look at it.
Okay.
One more comes to mind anyway, the big big sort of topics that seem to be coming out.
Draw worried and thinking about nonresidential construction at the curves that not all that is.
Yes, so much talk about distribution warehouse data center.
Almost like more horizontal construction versus vertical and I as I think about your business I think about.
The need the wiring and to something like that is it.
Is there way for us to think about is is a more wire at.
Projects like that versus what we think of the traditional he'll go or office tower Im just trying to I'm trying to think about that over the next.
Couple of years as demand drivers change.
Yes, that's a great point, because we literally were just discussing this with the other day.
I mean, one of our meetings when when you look at.
And you could pick the topic.
Whether its residential and nonresidential.
All most every category that we currently serve.
Specifically needs.
There's a reason for more power each each each category and so.
Gauges are changing.
For demand wise, the configurations of the wire itself.
We're being asked to make.
Products that in the past you wouldn't you wouldn't.
You wouldn't offer.
In a catalog right so.
Outside the catalog material is a good way to put it.
Each job that you can go in and discuss in great detail and.
You can change the insulation make up you can change the pairing you can change.
The gauges you can change a lot of different things and almost customized is.
The demand match up for our product categories, and so from that perspective.
We're investing we're spending as you know quite a bit of money.
Service Center and it is headed toward.
Answering those questions and providing solutions for.
The end users, it's it's constantly being reconfigured and requested.
And it's it's truly where the conversation goes from a sales perspective, and I think are as as the previous Guy Mystery Campbell was talking about when he said that he goes back to the Vince Rigo days.
Ironically, so do I have been here since day, one so in that if you look at whats changed.
Today versus maybe just five six years ago, it's a it's a hyper.
Focus on solutions at the end user piece and it is horizontal versus.
Versus vertical in some of it.
You know reverts back to we Havent lost the vertical piece, but there's a huge.
Opportunity for us.
When we go in and do those things versus the traditional competitive nature of some of the folks we deal with that simply runs their sales office like a trading desk and if the volume is not coming in the way they want they cut the price and so.
Those those days are not as.
They are not totally gone, but for the most part and I've said this many times publicly.
Two things you know, so building large price and delivery and.
We're currently in a situation where.
Price, we've proven is even less important you get it doesn't go away, obviously, but it certainly less important today than the delivery. There's so many other opportunities on the delivery piece and the service offering that we haven't so.
You're in the same vein that were in Brent and.
We're starting to see and confirming.
Some of our plans and opportunities or starting to our started hit the ground. So good question great topic, we're excited about it.
Just just for us to conceptualize that Daniel how much of the businesses shifted from.
Catalog.
Call it cost them over the last.
Whatever you want to call it five years.
Right I would tell you that over half of our shipments today, our non standard.
Okay, and that's a big change from five years ago.
You were doing we were doing.
10 15, 20%.
Of total.
Would be considered customer nonstandard and today, it's well over half.
Okay. Okay. Thank you for techniques to questions I appreciate it you've got man appreciated.
And this concludes my question answer session I'll turn the call back over for final remarks.
Alright, well, we appreciate the questions in the feedback in the participation today was fantastic looks like on the screen. So look forward to talking you guys next quarter. Thank you.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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