Q2 2020 NN Inc Earnings Call
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Good day and welcome to the and then.
Second quarter Twentytwenty earnings Conference call today's conference is being recorded.
At this time I'd like to turn the conference over to Mr. Mark Sutherland. Please go ahead.
Thank you operator.
Morning, everyone. Thanks for joining us Hallmark Sherman Vice President Treasurer.
Relations.
Walking huge <unk>.
2020 mortgage conference call.
Well she knows this morning won't be president and Chief Executive Officer, One belt 100 miles senior Vice President and Chief Financial Officer.
Thank you for a copy of the press release.
Well presentation. Please contact that went up in Mcgregor that you walked you through some of them one.
Yes.
Before we begin I'd ask that you take note of the cautionary language regarding forward looking statements contained in todays press release, So no presentation in the risk factor section of the company's and reports on form 10-K.
Figure ended December 31st you're talking about Q1 filed something as quarterly reports on form 10-Q.
Three months ended June Thirtyth 2020.
Hey language applies the comments made on today's conference call. They didn't you relationship as well as a live webcast.
That's the kitchen today will contain forward looking statements regarding sales margins foreign exchange rates.
No tax rate.
Positions synergies captured cost savings future operating results.
How much of our worldwide markets.
So we might you pandemic some companies financial condition.
The topics.
These statements should be used with caution are subject to various risks and uncertainties I give which are outside of the problem of central.
I think they should also includes.
Non-GAAP measures as defined by that's achievable.
Reconciliations such non-GAAP measures is contained in the tables in the final stretching the press release in the supplemental presentation.
I want to Tom will provide update.
Our results and then we'll open the lines for questions Steimel trying to follow up one belt.
Yes.
Thanks, Mark good morning, everyone.
We conducted our first quarter conference call and Mary we indicated that our near term focus is on four major areas.
This morning, I would like to report out on that progress on the progress that our team has made against those objectives.
First we established a gold providing a safe working environment for our employees all our manufacturing okasan locations in offices operationally standardized approach, where well using visitors have certain predetermine criteria, including temperature Josh before their admitted to one of our facilities. In addition, we can.
Personal protection to our employees and have been goes in maintaining consistent employee communications on best practices to come back to covert 19 virus. Unfortunately, we have had employees that's contracted the coburn 19 buyers and those situations have occurred we have implemented arsone hundred protocols, including employee Tracy.
It's infection of the appropriate areas you had production area for facility shutdowns.
I'd like to thank our leadership and employees for the discipline and the commitment that they have demonstrated and providing safe working environment Sep working environment as possible.
You're talking area of focus with meeting our customer requirements. Although we have instances work. The Toby shutdowns were required we were able to satisfy our customer volume requirements during the second quarter, while maintaining quality record consistent with our historical performance and strong reputation.
Third we are focused on flexing, our variable costs consistent with any reduction in sales volume and continuing to reduce our fixed overhead, including asking expenses. Our Q2 2020 sales were 150.4 million down 71.2 million from Q2 2019 level.
Due primarily to the impacted the Coburn 19 pandemic.
A reasonable estimates for our overall variable contribution from Sacramento itself is approximately 40% on each additional sales dollar.
Consequently, we would expect a loss of approximately 28.5 million odd that year over year sales were adoption.
Our reported Q2, 2020, EBITDA and adjusted EBITDA, only decreased 13.4 million and 16.4 million respectively from the same period a year ago.
12 million plus favorable variance from the 28 and a half million expectation is the result of a focus to reduce the fixed manufacturing costs and selling general and administrative expenses.
Yeah, asking expenses decreased from 26.7 million in Q2 2019 to 21 million in Q2 2020, <unk> decreased to 5.7 million in Q2 2020 recorded asking a includes approximately 2 million of expenses.
Associated primarily with our strategic initiative process.
It's encouraging to see the results of our cost cutting efforts, you're lucky and in our financial performance and our management team continues to focus on areas, where we can better control costs without sacrificing service.
The recent example would be appointment of grant Thornton as our independent auditor during the second quarter.
Transport has an excellent reputation for quality and we expect it and then while experiencing significant reduction in our annual audit related service fees. As a result can do this new professional relationship.
It's also important to note that our employees have been true partners. During this belt tightening process.
Hourly teammates have experienced layoffs and reduced working hours as a result of significant customer volume reductions, while our salary personnel continue to work at reduced wages and ignition all gain sharing and for one came matching contributions remains a Sunday I appreciate the commitment that our employees that make the n. during this difficult.
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Fourth goal that we discussed last quarter was to fortify our liquidity position.
We increased our cash position from 79.2 million at the end of Q1 82.7 million as of June 30, due primarily to the generation of 1.3 million in free cash flow during the second quarter.
Our focus on liquidity within three primary areas maximizing our operating performance on lower sales volume, which I previously discussed improving our working capital, which was down 3.7 million from a year ago and working with our lenders to provide additional flexibility under our credit facility.
A working capital has risen reduced to the significant sales reduction during the second quarter, we've been able to remain at a reasonable days sales outstanding at 64.1 day during a period, where many of our customers had desires to incentive payment terms to maintain their own liquidity position.
Our inventory turns deteriorated during the quarter due to the time necessary to adapt to significant lower sales volumes, Tom will provide more detail on this in his presentation.
As it relates to our credit facility. We recently signed an amendment to our credit agreement, which way the existing leverage covenants for the second and third quarters and replaces that with a minimum liquidity covenant. We expect that this amendment will provide us some flexibility needed to continue our strategic initiatives process over the next five mile.
If necessary.
Strategic initiatives process is ongoing and has incorporated in the valuation very broad range of operational financial and strategic options with the goal of reducing leverage and enhancing shareholder value. As we've said before we have a great company and really good businesses. Moreover, our organizational structure allows for good flexibility as we.
Continue our strategic review and look to enhance shareholder value.
This would be seven of our comments regarding this process as always we appreciate your understanding that patience as we continue to pursue alternatives associated with this important initiative.
Turning to page five.
You can see that the impact of the cold 19 virus cannot ourselves to the second quarter and year to date.
On a consolidated basis total revenue increased 32.1% versus the prior year due primarily to issues associated with the calling the virus scan data.
Sales for our life Sciences group were up 20.7% due primarily to the delay and elective orthopedic surgeries, especially those related to large joint replacement, our mobile and power groups were negatively impacted by 48.3% and 27.1% respectively.
You did a significant number of automotive OEM facility shutdowns and lower demand for electrical components to the customer shutdowns in Mexico.
The same issues have caused company.
Why sales for the six month ended June 30 to be down 19.5%.
For the six month period like sites in the sales were off prior year by 11.8% power solutions was up 17% and mobile solutions resolved 20 point.
6%.
I'd like to turn it over to Tom to file for Tompkins, providing more in depth reveals our financial performance for the quarter Huh.
Thank you Warren.
Please turn to slide six which includes our second quarter results on a GAAP non-GAAP, excluding special items and total adjusted non-GAAP basis.
The special items include onetime unusual expenses.
And the integration non op items, our expenses related to the number of acquisitions and integration activities made over the past few years.
Couple of points on the slide.
Sales shortfall year over year related to the pandemic.
Had a negative impact on our financial results.
The sales shortfall, we were able to flex the business.
Due to the cost cutting activities.
John had mentioned in his opening remarks.
It really shows that we were controlling our costs in a very difficult environment.
The second point on this slide is that despite the sales shortfall, we were able to hit double digit EBITDA margins on a reported non-GAAP, excluding special items in a total adjusted non-GAAP basis.
Let's go to slide seven which provides a detailed bridge between reported GAAP non-GAAP, excluding special items total adjusted non-GAAP.
Let's focus our attention on the upper portion of the bridge.
There were three tax affected special items in Q2 2020.
An asset write down <unk> point Sevenmillion.
Fairfield move costs, a point threemillion as we sold the facility.
And point Sixmillion for severance agreements.
Items impacted the second quarter tax expense.
First the MLL carry back provisions of the care.
Provided a favorable impact of 1.8 million.
And the second the unfavorable annual tax rate impact of the prior quarters Nondeductible goodwill write downs impacted the tax position by 4.7 billion.
In the prior year quarter, there were four tax affected special items, consisting of 1.3 million of asset write down.
Brazil, FY 18.2 million.
Severance a point ninemillion and divested businesses <unk> point Sixmillion.
Now, let's turn our attention to the lower section of the bridge.
The tax affected non operational adjustments relating to capacity and capabilities development professional fees and integration and transformation, we're down 1.4 million year over year.
Tax affected FX on intercompany produced by point 3 million year over year amortization of intangibles was down point threemillion year over year.
Turning to slide eight.
Net working capital at the end of the second quarter was 182.9 million compared with 213.6 million in the prior year, a decrease of 30.7 million.
Working capital turns for 3.3 turns for US is 4.2 turns in the prior year.
The decrease in working capital turns related to the sales shortfall due to the pandemic.
Do you get sold increased versus prior year by 1.8 days inventory turns decreased by 1.4 times.
And the accounts payable days decreased 5.7.
We expect working capital turns to improve as volumes normalize in the next few quarters.
Please turn to slide nine.
Net debt at the end of the second quarter was 767.9 million versus 862.1 million in the prior year, a decrease of 94.3 million.
Yes increased by 60.6 million as we increase the boring on our revolver.
During the quarter, we amended our credit facility as more and had mentioned loving leverage covenants for wave for Q2 in Q3. The amendment requires a minimum cash balance measured at month end at a minimum daily cash balance.
Yes. The amendment allows this time for the businesses to recover due to the pandemic and continue our strategic review process.
Although we have made good progress to improve our liquidity and implement cost reductions during the quarter. Our 10-Q will show us as a going concern given the uncertainty economic environment.
Why town shows our free cash flow for the quarter.
Free cash flow was 1.3 million in the second quarter 2020, compared to a cash use of 7.8 million in the prior year.
Next weekend improvement.
Year to date free cash flow is point 2 million for instance, a cash use of 24.6 million in the prior year again, a significant improvement.
As mentioned on the bottom of the slide it is a fifth consecutive quarter of positive net cash provided by operating activities.
Slide 11 shows our capital spending depreciation and amortization trends.
Yes capital expenditures were 4.4 million or 2.9% to sales for the second quarter.
Compared to 14.9 million or 6.7% of sales in the prior year.
Year to date capital expenditures were 15.6 million or four or 5% of sales persons 29 million or 6.7% in the prior year.
The company anticipates capital spending to be in the range of about 30 million for 2020 in response to covert.
With that I'll turn the call back to warrant.
Thanks Kim.
We have presented additional information for each of our operating groups starting in life Sciences on page 13.
As I indicated previously life Sciences, Q2 revenue has been impacted by 60% reduction in electric orthopedic surgeries when compared to 2019.
As a result, we've also seen a reduction in our backlog from 163 million at March 32020 to 142 million at the end of the second quarter.
Despite a significant sales reduction our reported EBITDA and adjusted EBITDA were 22.4% and 25% respectively.
Cost reduction efforts implemented in reaction to the sales impact helped offset the contribution loss from reduced sales.
We currently expect that our volumes over the remainder of 2020 will be flat to slightly down when compared to our second quarter results as our customers continue to react to reduce elective surgeries and focus on reducing existing inventory levels.
Normalization of elective surgery demand to 2019 volumes is not expected to occur until sometime in Q2 2021.
We will continue to focus on flux productivity and cost control over the remainder of this year.
The mobile solutions group the mobile solutions business summaries included on page 40.
The mobile solutions group was hardest hit by the krona fires pandemic in Q2 as OEM manufacturers in North America in Europe were shut down during most of April and may, causing a 48.3% reduction over the prior year levels.
June saw an improvement in sales as they rebounded to be over 50% greater than maybe levels.
Despite a 38 million reduction in sales the group posted positive GAAP and adjusted EBITDA of nine and 10% of sales respectively. The reduced variable contribution margin from lost sales was offset by approximately 6 million in indirect in s. DNA wages and related benefits along.
But significantly reduced travel costs.
As we discussed last quarter, we expect that volumes will remain below capacity for the remainder of 2020. We currently expect that are trying to operations will perform at normalized volumes North America will strengthen further at the beginning of Q4, and our European and Brazilian operations will experience reduced volumes due to cold.
Overall, we expect sales for the balance of 2020 to be approximately 60% greater than our Q2 running right.
Our focus in mobile solutions will be on Capex containment working capital management in flux productivity.
Moving on to power solutions on page 15.
Our second quarter sales decreased 27% year over year due primarily to lower sales caused by cobot 19, including the closure of customer facilities in Mexico from four to six weeks and delayed customer approvals for certain aerospace and defense programs power recorded actual EBITDA of five point.
8 million or 15.4% of sales and adjusted EBITDA of 6.2 million or 16.5% itself.
Both were down from prior year levels.
Due to production and sales.
During the first two months of Q2 power experienced unfavorable variable margin performance versus our internal expectation caused by production shutdowns and employee absenteeism due to cope with.
Our variable margin performance improved during June 2020, and we expect that trend to continue through the balance of 2020 on the sale side. We expect that Q3 in Q4 sales will stabilize at level slightly below those experienced in Q1 due to improved backlog of aerospace and defense business and then.
Proved stability in the demand for our electrical components.
That's what other groups our power management team will be focused on flux productivity working capital management and cost reductions.
Based on my commentary surrounding each of our three groups. We expect companywide failed to improve over Q2 levels due to expected improvement in sales for both mobile and power groups, obviously thing I'm certainly not associated with the cobot pandemic, we'll continue to have a dampening effect on each of our three business groups.
Through the remainder of 2020, causing our view of Q3 in Q4 sales to be approximately around the midpoint between Q1, which was slightly impacted by coping and Q2, which was significantly impacted by the cobot pandemic.
Page 16 summarizes the goals that we had been operating too and that remains significant objectives for the remainder of 2020.
Speaking of our employees and satisfying our customer requirements will remain a bobby its importance. We will continue to adjust our variable cost with CL fluctuations and reduce and work to reduce our fixed and as teenage expenses.
Improving our cash flow and maintaining our liquidity and these uncertain times as a major priority key tenets of that objective or reducing capital expenditures and working capital.
Inventory will be a major focus in the second half as we believe we have opportunities to reduce working processing finished goods based on our current inventory turn metrics, although a reduction in wip and finished goods couldn't result in lower earnings due to under absorbed the manufacturing burden, we believe the trade off for increased liquidity.
He is a positive.
Lastly, we will continue to manage our cash position to our second half plan in order to comply with the liquidity requirement in our credit facility.
That concludes our prepared remarks, and I will now I'll turn the call back to the operator for questions.
Thank you.
If he would like to ask a question Keith cycles by pressing star one on your telephone keypad.
If you're using to speakerphone. Please make sure you know mute function it turned out to allow your signals to reach our equipment.
I can press star one to ask a question.
Well pause for just a moment to allow everyone an opportunity just picked off the question.
Yeah, we'll take our first question from Rob Brown from Lake Street Capital Mac.
Please go ahead.
Good morning.
Morning, right.
First question is around sort of Ah you have some pretty good or color on the mobile in the power in particular in terms of visibility, but but a route.
How is the visibility in those markets markets is getting better sort of daily.
The day to day, just two cents, a kind of what you're seeing in those markets.
Sort of confident you aren't the visibility at this point, which I'm sure is.
Great, but just want to get a sense, where you're out there.
Yeah.
Rob I gave some guidance as it relates to what happened in June I'm in a couple of cases in the mobile cases. An example, we saw significant uptick in mid June period that was actually 50% greater than what we saw some sales volumes in may so from a trend standpoint, it's going the right direction.
As it relates to our outlook.
I gave you gave our view of that.
As it relates to the reliability of that normally at least on the mobile site. The Oems tend to have a pretty.
Strong structure as it relates to their production schedules.
So at least in the short term and up four to six week Wendell we feel relatively comfortable with the forecast.
As as I, probably talked about in the past we also work.
You know we establish our our sales forecast is based off a couple of factors. One is what we're seeing from the customer as it relates to the leases that we get that our farm either either from or plan.
Within a 12 week window and then we also use I you test data as it relates to.
What I test is predicting from a macroeconomic environment as it relates to overall automotive sales and we try and pair that and match that up well with what we're seeing from the customer in order to get a balance and our forecasted outlook.
As it relates to the power side, we used some of those same types of methodologies with using our customer demand and then try and understand what's going on in the construction and housing markets and on an overall basis within the economy to balance out our forecasts from an expectation standpoint.
Okay. Thank you, but that's great color and then in the on the margin I'm kinda profile.
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You did pretty good job and maintaining the gross margin profile, but but how do you sort of see that.
Do you expect that to to grow or just sort of stabilize here given your cost reduction efforts and it really.
Depends on.
Revenue growth just maybe directionally on the gross margin what's your thoughts.
Yeah, it's we expand.
The sale to expand over June three in Q4 as I indicated I think that what we'll see is an improvement in the margins over Q2.
As I indicated early in my comments, we you know kind of a rule of thumb for us when we see an incremental sales dollar we'd start to associate 40% of that falling into you know our gross margin.
And.
Given the fact that the company has been very successful our teams have done an excellent job of taking fixed costs and selling general and administrative expenses out of the business. We expect the majority of that carry over into the future now just as a just as the caution.
On that we'd have had reduction in wages, but our hope is that once we see more farmer 14 on the recovery in the economy, we hope to restore some of the wage cuts that we we put in place in April I think April time.
Frame.
You know we.
Our preference would be to do that sooner rather than later, so that will that would pull back the margin just a little bit, but I would tell you that the impact from about 40% contribution margin on incremental sales. Our view is will offset that.
Okay, great. Thank you I'll turn it over.
Thank you we will now take our next question from Daniel Moore from CJS Securities.
Warning Tom Good morning, Thanks for taking the questions.
Morning.
Morning.
Great color on life Sciences and understood.
As it relates to what's going on with elective surgeries.
Did I hear correctly, you I guess you'd expect Q2 to be the first opportunity Q2 of next year to be the first opportunity to get back pre coated level.
That does the thought process at this point.
Yeah, Yeah, and the way that we look at it.
That's when the elective surgeries would.
Essentially rebound to the 2019 levels.
And based on our.
Relationship with our customers, we typically our volumes kinda crop. Shortly thereafter, so we may have a one quarter lag to that as it relates to the resurgence and the life Sciences business volumes.
That's helpful and then.
At this stage.
You from a longer term perspective, as we look at 22 and beyond what would be the expected growth rate.
You know sort of market as well as for and then in that segment.
Yeah, our longer term view is that.
That the second half of 2021.
We'll be a return to 2019.
Types of volumes, we what we seen in this process you know dealing with a coping pant that Mike is some of our customers are looking at you know the timing of holiday, we're going to introduce some new programs, which is always a positive for our business as it relates to inventory Phil.
They're looking at potentially.
During the implementation of some new programs in order to conserve their liquidity and their capex, which would soften the recovery just a little bit for us. So as we look at 2022, we see that is a full return to volumes above.
Where we were in 2019, and then probably seven or 8% annualized growth rate thereafter.
Got it helpful.
And then.
Don't want to.
Push you out into the process itself, but can you comment on your ability to conduct the strategic review over the last three months, given cobot, 19, and where that ability stand today.
Yeah, you know <unk> not going to get too deep into the process I just would tell you that certainly it's been a challenge with the coal bed and and where the financial markets and then obviously, that's a big component of trying to.
Work kind of process like that so it's been a challenge and that's one of the reason that you know it's been such an extensive process.
I understood I think that's it from me I'll jump back with any follow up thank you.
Thank you.
Ladies and gentlemen.
Or any additional questions. Please press the star followed up by the one at this time I said reminder, if you're using a speaker equipment, you'll need to list the handset before making any connection we will now take our next question from Steve Barker from Keybanc capital markets. Please go ahead.
Morning, guys.
Let's see oriented.
Good good to see positive free cash flow year to date I'm. Just can you talk to the segments in terms of cash burn or cash generation in Twoq, you just to give us a sense for how you were able to manage the business and the trough quarter and and just broadly what do you expect for the back half.
You know that.
Steve on a on a segment by segment basis, you know I think you take a look at the EBITDA. Each one of our groups has been generating that and then a capex associated with it so I would tell you that.
Each individual case, our groups I think did.
As good a job as it could be done in the second quarter in Vienna gene.
Cash flow and the most important components that they manage.
With our corporate team.
It's capex and working capital and you can see from the results that we had that our capital expenditures are down significantly from the historical runway. So, whereas we indicated last quarter that we had an extreme bias towards only spending maintenance type of capex and that has been the focus of the team.
I think that we've done a good job on that from a working capital standpoint, our view is that each one of our groups can do a better job on the inventory side.
We've seen our inventory turns.
Go down and part of the reason for that is the inability to flat some of the orders that we had some of the raw materials that we order comes from overseas locations. As you know were ordering directly from the mill in certain cases and those orders have.
10 to 12 week lead times associated with them. So when the volumes depth as quickly as they did from a coven standpoint, it was difficult for us to react so what I talked about the fact that we have significant inventory reduction goals in the second half a year I think that's true of all of our groups I know that.
You know the mobile and a collar groups in particular are very focused on the wip and finished goods components and we targeted at significant reduction there, especially in the fourth quarter from a timing standpoint, and the same is true err on the life Sciences side, which actually tends to carry a little bit higher inventory levels.
And the other two groups. So that's an area that we're going to work on as well as we look out into the.
Future you know, we're still going to control the capex, that's going to be a big piece of it is this thing rebounds were very cautious as it relates to what the working capital demands on the business will be you know I gave you a rule of thumb as it relates to variable cost the rule of thumb for us on working capital. It's you know for in each group.
Pretty tight range I would tell you between 20 and 23%, but as we look at it you know to put sales dollars back and quite cost us about 20% to 23% from a working capital standpoint.
Against the annualized feels dollar amount. So we're gonna be working very hard with our customers to make sure that were maintaining a payment terms you know obviously, there's always there's always crusher there.
But I think that as we as we go through the year. Our expectation is we're going to continue the only thing that would prevent us at this point in time based on the forecast that we see from a sales standpoint, we still expect to generate or some positive cash flow I don't think it's going to be a lot given the volumes.
And the thing that can be rail us from that certainly is the working capital and we're gonna have to manage that really hard.
Right No I think I think to be able to generate free cash flow. This year would be a great accomplishment, but as you as you looked at how you're managing the business and you know a crisis situation are you finding areas, where you can make structural improvements, whether it's in working cap or or any of the other processes that.
Can improve the cash flow profiles the business going forward.
Yeah.
I would say, yes, and you know I'm going to go back to a more generalized statement on that this is the this is a company and threed businesses that are built around continuous improvement getting better every day. So the moment you start believing that you can't improve it really goes against the core philosophy that becomes.
But he built around so our view is that yes, there are significant opportunities for improvement and a couple of art groups. We've established Sid targeted a percentage of sales where our fixed cost our indirect labor in some of our other cost drivers need to be and we're not there yet and we know that we need to achieve those objectives.
From an AD CNH standpoint, there's still opportunities for us from a a consolidation standpoint, the mobile and power group as an example, ours just getting started on what they can do from efficiency standpoint, our IP teams are working very hard to try and improve the ASCO.
It should see of the information that's delivered.
To our operating groups and we think we can gain some efficiencies there as well.
[noise] and shifting to life Sciences, [laughter] has the pandemic affected customer willingness to engage an outsourced manufacturing or is it slowing inquiries down or or are you seeing accelerated opportunities for new business just how as how does this change things if at all.
Yeah, I would tell you initially the view that our customers.
Not really went.
As it relates to a consolidation has its supply base and outsourcing it was kind of like let's let's full stop right now, let's understand what's going on in our in our industry, let's let's understand where we need to set our inventory levels based on this new norm. So there was a.
They are a suspension of that type of activity for a short period of time, but once everybody had an opportunity to react to that situation and understanding as best we can today. Our customers are now reengaging with continued outsourcing and talking to us.
About a consolidation of the supply base and we expect that that will continue and probably will pick up a little bit more seat at the beginning of next year.
Okay.
If revenue in life Sciences is flat sequentially and in Fourq, you can you drive some margin increase.
Can you improve the decremental margin or or <unk> and just how would you think about free cash flow for that segment specifically.
You know I I'm not.
I would probably not targeting.
Well, we do we actually do target free cash flow by age Division.
I don't I don't have a number off the top of my head for that right now I would tell you like I said that focuses as it relates to margin improvement our expectation as we're trying to drive a full percentage point of sale of of improvement through the balance of the year and with the can.
Came that cash flow that that will by default drive free cash flow from that business.
Yeah, I don't know the best number off the top of my head.
Okay.
Tom do you have any additional comment on that I'm, just trying to ask Tom that if I got.
No I don't I think you hit the points worn I don't have that number off the top my head either okay.
And so if threeq revenue is somewhere between what you saw on one Q into Q.
Given that sequential increase and your cost actions.
First on mobile specifically can you get back to a positive operating margin and or on a consolidated basis can you get back towards the margin level of one Q or is that kind of a bridge too far.
From a revenue standpoint.
I'm trying to remember a first quarter revenue.
For mobile 200, Oh for mobile Yeah Oh.
Oh, you I thought your question with mobile.
Mobile and then consolidated so yeah, let's let's talk mobile first first quarter revenue was 70 million.
Yeah. So can we get back to that level of margin I think that.
Given what were expecting in the second half of the year, probably be a little bit of a stretch because we're going to be below that from an overall sales standpoint.
But obviously, we're expecting continued improvement over the balance of the year.
And if you look at what we did in the first quarter Yeah. It was 69.8 million.
We're going to be shy of that for the second half of the year and if you use from a guidance standpoint, some of the sales estimates that I provided and talk about that 40% decremental Oh.
You know you're probably have a good estimate of where we think we're gonna be.
Okay.
I think that's it for me then thanks.
Thank you.
That concludes today's question and ask the session. Mr bonds that men at this time I'd like to trying to conference back over to you find additional I told the Max.
Yeah. Thank you I'd like to thank everybody for participating today, you know my overall view is that.
Our team did a great job through the second quarter ought to have positive free cash flow in this environment and to maintain our liquidity position over where we were in the first quarter were I think significant accomplishment and like to thank the whole team for that and appreciate the participation.
Analysts and some of the shareholders that are looking today. So thank you for that and family today appreciate your time.
This concludes todays conference call. Thank you for your participation you may now disconnect.
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