Q2 2020 Allied Motion Technologies Inc Earnings Call
Greetings and welcome to the Allied motion Technologies' second quarter fiscal year 2025 afterwards.
At this time all participants are in a listen only mode. A brief question and that's a session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded and it's now my pleasure to introduce your host Craig Mahalik Investor Relations. Thank you Greg you may begin.
Yeah. Thank you and good morning, everyone. We certainly appreciate your time today as well as your interest and Allied motion.
Joining me on the color Dick Warzala, our chairman President and CEO, Mike Leach, our Chief Financial Officer.
Yeah, Mike are going to review, our second quarter 2020 results and provide an update on the company's strategic progress not look after which we'll open it up with you and I.
It should have a copy of the financial results were released yesterday after market close if not you can find it on a web site at Allied motion Dotcom.
The website, you'll also find slides that accompany today's discussion if you already doing on slide please turn to slide to put the safe Harbor statement.
As you are aware, we may make some forward looking statements on this call during the formal discussion as well starting in Q1 I.
These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially and what it stated on today's call.
These risks uncertainties and other factors are discussed in the earnings release, that's wells with documents filed by the company with the Securities and Exchange Commission you can find these documents on our website or does he see dotcom.
I want to point out as well that during today's call will discuss non-GAAP measures, which we believe will be useful in evaluating our performance.
You should not consider the presentation of that's additional information in isolation or as a substitute for results prepared in accordance with gas we provided reconciliations of non gap to comparable GAAP measures and the tables accompanying the earnings release and fly with that please turn to slide three and I'll turn over to pick up again.
Thank you Craig and welcome everyone.
Oh It has continued to spare a steady course through these challenging conditions other cobot 19 pandemic.
I would like to acknowledge the incredible efforts dedication and resilience of our employees, who have done an excellent job, helping us respond to the ever changing environment and unique opportunities that are presented themselves.
Our second quarter performance was relatively solid and demonstrated the success of our one allied strategy.
So diversification of our revenue base the execution of our lean tool kit Allied systematic tools are A.S.P. for short.
The integration of dynamic controls all played a role in driving our results.
Despite second quarter organic sales decline.
Our gross margin held up well, we achieve solid profitability and we continue to generate significant cash from operations.
Okay.
From a market perspective.
We successfully navigated what we believe what's the low point for us during the cold at 19 pandemic.
All our facilities continue to operate at our team was able to effectively mobilized and engage with customers.
I was particularly impressed with our ability to flex up and support the increased demand that came in from various medical market customers.
Many of which are at the forefront of combating.
Pandemic.
In fact.
Sales in the medical market, which includes contributions for our dynamic controls nearly doubled on a year over year basis.
Outside the medical market gains, we experienced broad end market declines as industrial activity slowed due to shutdowns and demand deferrals.
In particular, our vehicle market was hit the hardest.
There are some encouraging trends that give us optimism as activity has since increased and demand has picked up.
We have also kept our team focused on several new project opportunities, which included the recently announced fourth major awards since 2017.
To provide solutions for our vehicle market in Europe and Asia.
This additional award further validates our strategy to be a leading global provider of controlled motion solutions and demonstrates the market's recognition of our ability to develop highly reliable solutions for the vehicle market.
Adjusted to reflect current exchange rates. The total value of these awards for vehicle market solutions is approximately $325 million.
I will remind you that the value of these awards is not reflected in our backlog and we only recognize them into backlog when they are released to production.
We have been focused on cash conservation and we quickly adjusted our variable cost structure to align with market changes, while also maintaining strong discipline over fixed cost.
As a result of these efforts we managed to generate almost 10 million a cash from operations and that enabled us to reduce totaled that might nearly $8 million during the quarter.
Given our prudent actions, we remain confident that we have the liquidity to address the current situation and the financial flexibility to beyond the offensive as the economy recovers.
I would also like to touch on our recent announcement to realign and expand our leadership in organization structure.
We have grown to a size, where a broader leadership base will improve our capabilities and ensure we meet the growth and profitability objectives of the company in the future.
This initiative infrastructure is consistent with and in support of our long term strategy as it leverages and crosses geographic and technology boundaries and creates goetter greater cohesion across the entire organization.
On the operation side of the business.
We have created three new business groups and promoted three individuals who have proven themselves as strategic leaders.
Each well look to drive growth opportunities and improved profitability as we further leverage the wide breadth of technologies and our geographic reach.
In addition.
We expanded the breadth of our global engineering team to improve system solution capabilities and drive organic growth through innovation.
With a goal of continuing to exceed normal industry growth levels.
We also fairly <unk> further elevated our asti focus to accelerate implementation and ensure we continued to improve efficiencies.
And drive growth and innovation across the entire organization.
And finally as acquisitions have been a key element of our growth strategy and our past success.
We have formally added a business development role to ensure we continue to drive and consummate strategic M&A opportunities in the future.
Lastly, this realignment allows me to focus more intently on strategic initiatives to drive increased shareholder value.
While also providing be greater bandwidth to ensure we meet the long term goals and objectives or the company.
Despite the cobot induced recession. These are exciting times for ally.
We are confident in our initiatives and the strength of our business model and we will remain vigilant and continued to implement the measures required to ensure the health and safety of all of our employees and their families.
With that let me turn it over to Mike or more in depth to review the financials.
Thank you Dick we provide an overview of our top line on slide four as a reminder, our results include dynamic controls, which we acquired in March 2020.
Revenue in the second quarter was 86.7 million down 6 million or 6% and included the FX headwind of 1.4 million.
The impact of the covert 19 pandemic created extended shutdowns for many customers and our vehicle industrial markets for much of the quarter. However, sales to our medical markets, which included 9.9 million from dynamic controls almost doubled helping to partially offset those declines.
Sales to U.S. customer for 50% in the second quarter down from 58% than the prior year period with the balance of sale to customers, primarily in Europe, Canada and Asia. The shift in geographic mix reflects the addition of dynamic controls.
Slide five shows the change in our revenue mix by market and the growth of each market for the trailing 12 months ended June 30.
The dynamic controls business can be found within medical and accounts for a significant piece of the 35% growth in this market.
As we've discussed and demonstrated growing our medical in AG markets are an important element of our strategy to broaden the scope and diversification of the business.
And to enhance our margin profile.
Well, we have the high single to double digit trailing 12 month growth and most verticals the drop off in demand within vehicle due to covert 19 as reflected in the 13% TTM sales decline.
Yeah.
As highlighted on slide six our gross margin for the quarter was 30.5% down just 20 basis points from the prior year period.
Our cost management efforts and improved mix, given the greater percentage of medical market sales, including the favorable impact of dynamic.
Mostly offset the volume impact from the decline in vehicle.
Our operating performance is on slide seven.
While we continued to be prudent on the expense side, our operating performance for the quarter still reflected some negative leverage given the reduction of sales.
Operating expenses as a percentage of revenue were up 220 basis points largely due to overall revenue with incremental expenses related to dynamic higher business development cost an incremental covert 19 related costs associated with the in ensuring employee health and safety.
It's important to note that we are maintaining key engineering capabilities, which we consider vital to drive future growth and continue to gain market share.
Okay.
Turning to slide eight you can see our bottom line and adjusted EBITDA results.
Net income for the quarter was 2.9 billion EUR 30 cents per diluted share compared with 4.4 million or 47 cents per diluted share in the prior year period.
Excluding business development costs adjusted net income was 3 million with 32 cents per diluted share.
The second quarter effective tax rate was 29.9% and we anticipate the effective tax rate for the full fiscal 2020 to range between 27% to 29%.
Despite current headwinds we continue to demonstrate our cash generating capabilities.
Adjusted EBITDA was 10 million and as a percentage of sales was 11.6%.
We use adjusted EBITDA as an internal metric and believe it is useful in determining our progress in operating performance.
Slide nine and 10 provide an overview of our balance sheet and cash flow.
We ended the quarter with sufficient liquidity as we generated a considerable amount of free cash flow, which was used to pay in part to pay down debt.
Cash and cash equivalents at quarter end were 19 million up 5.6 million from the end of 2019.
We reduced debt by 7.9 million in the quarter, resulting in total debt of 128.5 million.
Compared with year end 2019, total debt was that primarily due to the dynamic controls acquisition.
Debt net of cash was 109.4 million or 46.4% of net debt to capitalization.
Our bank leverage ratio was 2.64 times at quarter end.
Why are we while we are comfortable at this level given near term uncertainty, we continue to focus on paying down debt.
Recall that our maximum leverage coverage ratio covenant debt to EBITDA is 3.5 times, reflecting solid financial flexibility.
Year to date capital expenditures were 3.6 million, we continue to expect our fiscal 2020 capex to range between 10 million and 12 million.
Which will enable key projects to move forward, while deferring lower priority activities.
Second quarter inventory turns were 3.5 times down from 4.1 times at year end.
At the time, we could continue we continue to face an uncertain supply chain environment with extended lead times and customer pushouts, leading to higher inventory level to support our broader customer base.
Our Dsos also elevated at 53 days due to the timing of collections of receipts and was not due to deterioration in credit quality that credit quality metrics actually improved since the sequential first quarter with lower levels of past two accounts.
Let me reiterate that we're very pleased with our ability to generate cash and reduce debt. During this downturn. We expect continued strong cash flow generation and believe our capital allocation strategy positions us well successfully navigate navigate the conditions ahead.
With that I'll now turn the call back over to Dick.
Thank you Mike.
As depicted on slide 11 orders were more than 80 million in the quarter and reflected 1.8 million of unfavorable FX.
Backlog at quarter end was approximately 128 million down 4% sequentially.
As I mentioned earlier, we secured a nomination of another award to provide a customer specific solution for our vehicle market and just a nominal amount of these awards is currently included in our reported backlog numbers.
While we have begun shipments at very low levels for the first of the for awards. The Cobot 19 pandemic has slowed to production ramp up for these projects through the remainder of the year.
As we look to the near term we remain cautious given the uncertainty the current covered Nike and environment as demand signals continued to be mixed and highly dependent on the vitality of the end markets we serve.
Some markets provide limited visibility and may be impacted by ongoing macro uncertainties due to a different recovery rates from the pandemic.
While there were other verticals that are stabilizing or showing encouraging trends.
Ultimately for US we're focused on the elements that we can control in particular that is reflected on our new product development efforts, which continue to be a high priority.
We are on track to create several exciting new products and solutions to ensure that we stay at the forefront and continue to meet the emerging needs of our served to target markets.
Our business has demonstrated outstanding resilience and we are firmly committed to retaining our critical pellet.
As a technology slash know how driven company. It is essential that we continue to enhance our engineering capabilities to supplement and support our customers through these very difficult and unprecedented times.
Overall I am confident that the measures we have taken will allow our organization to continue to operate safely.
We will adjust and prioritize our customers' needs as required that through the disciplined execution of our long term strategy and the guiding principles of our one allied culture deliver superior results over the long term.
With that operator, let's open the lines for questions.
Thank you we will now be conducting your question and answer session. If he would like to ask a question. Please press star one on your telephone keypad confirmation Tom will indicate your line is in the question Q you May press star to if he would like to remove your question from the Q for participants usually speaker equipment, and maybe necessary to pick up your handset before pressing the star Keith.
One moment, please what we poll for questions.
Our first question comes from the line of Greg Palm with Craig Hallum. Please proceed with your question.
Good.
Good morning, everyone nice results, especially with with everything going on here.
Wanted to to maybe start with slowed some comments that you made.
He said.
You know, it's pretty clear that you hit the low point in Q2, you all you're seeing some encouraging trends in vehicle, which is your largest market.
Standpoint, it sounded like there was a little bit.
Sort of cautiousness in there so maybe a little bit more could you tell on what you're seeing in July.
Your sort of walk in our view on the second half year.
Sure.
Thanks, Greg.
Well the vehicle market, we did see some delays.
And I'll talk.
You know the on road vehicle type market delays in getting updated schedules and people and companies coming back to work and so far so yes. It did have an impact on second quarter with regard to off road vehicles, we saw a very strong pick up and the second quarter and we have.
Yes.
Clearly expect that to continue through the remainder of the year and it's very strong.
And then the on road side, we see it now coming back and I would say.
We're at the point here, where we have visibility, where it's 80% to 85% of.
What are at original demand expectations, we're in and improving beyond that so.
While we're cautious here.
We do see some very positive signs and those in the vehicle at our vehicle markets.
Okay. That's that's helpful. As you know what about medical I mean that was clearly a stand out and I know you talked about dynamic a little bit.
Contributor, but even if.
Back it out segment revenue was still up quite a bit on the year over year base. So maybe just talk about what some of the largest contributor we're in there.
Sure.
Yes the.
The ventilation the ventilator respiratory respirator that market dialysis machines all.
Which we serve we saw very.
Strong pickup in demand.
And also some other auxiliary equipment that goes into the hospital environments for staffing.
They were expanding the number of.
Hospital rooms, and facilities and so for us. So we saw very strong demand there and thats continuing.
We think that.
There was a catch up that had to occur Theres also a modernization of equipment. That's in facilities and I. We think that we'll see some continued demand there into the future. In addition to that I think there's some very encouraging opportunities for us that have come out of this.
So with regard to.
Sourcing product from in for North America in North America, and I think we're well positioned to be able to.
Capitalize on some of those opportunities in the future we have.
Okay products that are fairly high performance and were certified.
Medical applications in a number of our facilities. So we do we do see some strong opportunities for the future we see some.
Demand continuing through the third quarter in.
I think they future for us in that area is quite bright.
It sounded like you were maybe alluding to some new customer opportunity how much out of.
Q2 strength was driven by overall market growth.
Maybe some share gains and is is the right way to think about it where there could be some new customer opportunities going forward.
Yes, let me, let me clarify that a little bit too because typically as you know and the types of products that were.
Being used I mean, they go through an approval process and wild approval process can be is accelerated in these times.
Demand that we saw was based upon existing customers that we already had we're already designed in and improve dot.
So in addition to that.
We are working on new opportunities for share gain.
And I think we're going to certainly take the opportunity to leverage the fact that we design and produce.
A significant number of our medical products in North America. So.
The second quarter reflected existing customer base with increased demand beyond out into the future. We have opened up new opportunities that we feel.
Very confident that we're going to secure some share gain and new customers along the way.
Okay got it.
And then appreciate the color on the organizational changes the leadership structure I think it'd be helpful to get some maybe additional color on.
The why now its employees.
The timing of the moves of it if you could provide a little bit of detail around some of your long term goals and objectives of the company.
I think what makes the optimistic got somebody leadership changes gets you there maybe faster or better than what what you were thinking before.
Sure well first off I'd have to tell you that these were planned.
In the first and second quarter.
And we delayed them.
Because we did not want the perception to be out here that we're making changes on a defensive basis. These are all offensive moves.
So we delayed totally the timing was we get I'm not saying we've got this behind US of course, as we mentioned bill there's got to be still be some.
Instability and some of the markets, but the structural changes were.
Discussed in great detail.
I think our team.
As really develop nicely at strong religious ever been and I think our goals are going to be to continue this the growth and success of this company and it's going to take additional.
Resources and horsepower to do it. So if you noticed every aspect we hit on there.
We hit on the operational side, we had on.
Creating these groups, which would allow us further leverage from an operating standpoint, and then efficiency standpoint.
We leverage our technology across all these all the platforms.
We strengthened.
Yeah, we but we've made to what we used to call global electronics team.
Subtle change to that it's called global engineering team, which means that we've now are doing a much better job of modeling and simulating complete solution capabilities and it's very exciting stuff.
So that is the reason for the global engineering team and the excitement that I have around our capabilities, there and our our speed to market. Our speed of played a market because of what we've been able to do internally here and now pull that together in a way that gives the.
Major strategic offensive objectives are greater focus so that's been coming thats been building nicely and I think are at the point, where we keep making these positive steps forward.
We talked about Asap.
And as Rob Maida has picked up additional responsibilities in.
From an operating standpoint, and we merged what we used to call North American motors and that could products together.
Jeff Rondo, who had mechel products is very strong in HST, both in the growth in innovation side as well as the operating efficiency and as a partner to Rob We think that Theres no some significant opportunities for us to leverage Asti throughout the company. So that ours. That's there one of the things we've done there.
Sure.
In regard to Europe.
We've had we have one of our general managers spend with us for quite awhile is retiring at the end of the year and we have recruited in.
Okay and another individual in place since about on and on board and what we did is we again look towards.
Developing the synergies.
Okay.
That we can within channels, the supplier base et cetera, and now began to align the operations in Europe.
So.
I think if you get the theme here I won't have to go into every single once you get the theme. It's that we feel from an operating standpoint, there's there's lots of opportunities for us to leverage the foundation, we have but also to create.
Future synergies down the road.
And.
With acquisitions, they clearly have been part of our success in the past and.
We think we have a good formula for the acquisitions in the.
We're just we're going to make sure that we keep the pipeline full and as you know, Greg and everyone else out there no. Sometimes these take years to develop so.
We're planting the seeds, we have to have the ability to continue to reap the rewards from those who knows down the road 2345 years down the road. Okay. So thats. It's all positive it's all good stuff and the the leadership team is really excelled in.
I can't complement them enough at how well they work together here and help each other out through certainly this a pandemic as well as now getting us position for further growth in the future.
Is that help or do you have more specific questions no.
Gross or try to hitting all the growth drivers here.
No I appreciate all the color I think I'll leave it there back in the queue. Thanks.
Thank you Greg.
Thank you. Our next question comes from line of Gerry Sweeney with Roth Capital. Please proceed with your question.
Hey ticket Mike Thanks for taking my call I'm still playing on water to catch up any write down some of your answers on the last question there but.
Can I just dig in a little bit on the medical and vehicle side and this is more anecdotal.
It on a medical side.
Obviously, if dynamic controls and then you talked about ventilators dialysis, just a lot of demand.
Obviously, especially the ventilators.
Lots of press about that model.
Well its efforts to ramp up production.
How much of that could be transitory and then I think juxtaposed to that also some checks indicate it maybe some slowdown electrics elective surgery and maybe some slowdown on equipment on that side.
Looking at both those puts and takes out can you give us a little bit more insight as to what you're seeing going on in the medical market and how we look at it from that perspective.
Sure.
Thank you are correct. There are some of its transitory and what I was.
Yes, there was obviously an increased demand for equipment.
And.
Our take on it right now is based upon talking to our customers that demand there was that spike and big peak demand that occurred to get products into the marketplace.
But there's also a recognition that there's a need to.
Get modern equipment into hospitals, and Thats not going to go away. So I think you're going to see an investment in and a continued investment in so that people are going to get caught short in the future. So yes. There was a spike there was product put into the market, but we think theres going to be a continue.
Demand as people are going to upgrade their equipment and make sure that theyre positioned to better combat anything like this in the future.
So it's not going to go away immediately.
But we would expect going into next year less another crisis hit so some sort that.
The demand should softened going into next year.
You are at the other point you brought up was excellent points here on the elective surgeries and obviously knowing that we're supplier to that marketplace.
We did see some push outs and drop in demand, but thats come right back.
And so we and net debt markets really at the beginning stages.
If you read all the studies on it so we think theres some strong opportunities for growth in that market and we are well positioned for that in the future.
Got it so.
Not only just covert but that's the colicchio unless there was a catalyst for an upgrade cycle with medical equipment.
You're seeing that as well.
Correct.
And then switching gears vehicles.
Shut down into Q on road off road.
Channel checks I mean, you're looking.
Dealers are out right now so and.
Inventory.
Low so we expect.
Restocking efforts maybe.
What are you seeing from your customers are they ramping up production again or are they going back to normal level.
On wrote off road.
As an ancillary product.
A lot of targets, we can because I need a lot. It apparently 300 cars have been sold at the dealerships others.
If you demand out there right now.
Sure well, we see it yes, Jerry I think again excellent points, we see it I mean, if we if we look at.
What happened to us in April and demand coming from those markets. I mean, there were devastated and and it bounce back fairly quickly. So I would tell you that as I mentioned earlier that were 80, 85% going to 90%.
Of previous demand and the on road market I think the offer a market we're exceeding that.
So so I think.
Clearly there is definitely some increased demand in and I also have to tell you as say to you that is through this process here.
We had.
Installed another production line to build products for the off road market and it was.
Implemented in in Mexico, and our team down there was able to get it up and running and delivering product. So so again kudos to our team through all this they still kept these projects going forward and were able to make thing it make it happen in for us to meet the delivery demands and the accelerated delivery demands. So I think you again I think you.
Your perception of what's occurring in that market is and what we're seeing the alike.
Okay.
Switching gears, a little bit to some costs like opex headwind.
How much of that was.
I will say, maybe unabsorbed overhead and then how much of it was maybe some.
Excess covert costs, which.
It could go way are transitory as well how do we look at that when we're looking at the model we potentially fee.
Rebounded revenue.
So certainly from a gross margin standpoint, right. There was with the lower volume on them, some unabsorbed costs, and certainly not leveraging our fixed manufacturing costs as well as if we had to have that by him and right. This there'll be some tailwinds. There is that comes back.
From an operating expense standpoint, again, I think that is relatively stable again, it's reflective of adding the incremental costs associated with dynamic controls and just flexing that as a percentage of total.
Total sales them with sales being down I think you saw that basis point increase.
It really is reflective of just the.
The lower revenues more than it is an imbalance with expenditures.
So that should come back and then as it relates to covert related costs.
Hey that the coven costs were more moderate from an actual expenditures standpoint, whether that supplies or.
Cleanings or things like that where you feel it really though is in productivity right having to adjust shifts to accommodate social distancing lunch breaks.
Arrival times of employees and the like right. It's a matter of lost efficiency. If you will and so certainly that'll help with margins as well as as as.
As one we become more custom in practice at those things and to add if those things get relax overtime, obviously, we were maintaining that being diligent in our.
Our our safety processes. So that may continue for some time.
Thank you as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad, we do ask that you limit yourself to two questions before Repurposing. Our next question comes from the line of Dick Ryan with Colliers. Please proceed with your question.
Thank you say dead.
Good question on dynamic specifically it looks like obviously this thing thats checked all the boxes from a good acquisition for you guys, but if I recall there were some competitive.
Issues that the previous owner of dynamic was running into to kind of limit some growth im not sure if that.
Accurate some summary, there, but it's since you've had this now for five months can you talk about if that issue is gone away and what's you're just seeing in the.
General market demand for dynamic now that you on it.
Sure, but you're correct Dick and thanks for the question here.
Dynamic was owned by a major player in the patient mobility and rehabilitation marketplace. So obviously being owned by the parent company.
It limited their ability to provide solutions or sell product to the competitors.
So.
One of the reasons that we felt that.
Dynamic will be a great acquisition is that if we.
There are now allowed to go and they're not tied to one particular to apparel company, who has ownership over making established direction. While they were allowed to go compete and sell to other companies before I think certainly just given the relationship that was restricted or.
Restrictive in some manner and so that's gone.
And now.
So the processes is too.
Approach.
The other players in the marketplace and.
I'll start, bringing our solution forward in which we are doing in addition to that.
The dynamic had the electronic than the control side of it and Allied brings the motors and the gearing. So it's a perfect solution and it just continues to build on the successes we've had in the past to being a Mary and leveraged technologies to come up with a solution for our customers and Thats really what we're working on so.
That for the medical markets, but in addition to that because dynamic ads significant.
Core unit volume and mass and the electronic control area, there are dealing with safety issues, they're dealing with traction they're dealing with.
Interface.
That's common in all of our vehicle type applications, whether it's much automated material handling or its additional patient mobility and so forth. So I think.
We're looking at expanding that capability into markets that we're already serving at some new market opportunities for us. So we're quite excited about it we mentioned.
So when unfortunately, they kind of got lost here in the process of.
Of cobot hitting but.
Yeah. We're we're really excited about the capabilities to talent thats come onboard at our ability to leverage solution sell into not only the medical but other markets.
Okay. Thank you say when you look at the backlog.
Has there been any cancellations or deferrals of deliveries.
Indicated that's probably a three to six month flow.
Flow through but has there been anything below the surface cancellation or deferrals.
We havent seen cancellations, but we definitely have seen deferrals.
And I think if you look at.
The total demand in the market now that could change fairly quickly so but yes to answer your question we have seen deferrals.
We will normally we don't give much color about what's happened, but since July is completed we've had.
We saw a nice pick up in bookings.
In order intake so.
We hope that continues to accelerate but it was at a very nice level what some in some wins here are things that we have been working while working on that now have come through people are back to work and these things are getting released but yes to answer your questions. We did see some demand pushouts and I would tell you that in industrial.
As an area that we saw some of that.
And also a little bit in the and defense sector.
Okay great.
Thank you and congratulations on the continued progress on execution.
Thank you Dick thanks to.
Thank you we have no further questions at this time I'd like to turn the floor back over to management for closing comments.
Thank you operator.
And thank you everyone everyone for joining us on todays call and for your interest and Allied motion.
As always please feel free to reach out to us at any time and we look forward to talking with all of you again after our third quarter results.
Thank you for your participation stay safe and have a great day that will conclude the call operator.
This does conclude today's teleconference. You may disconnect. Your lines now. Thank you for your participation and have a wonderful day.
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Yeah.
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