Q3 2020 Harsco Corp Earnings Call
Good morning, My name is Shelby and I'll be your conference facilitator at.
At this time I would like to welcome everyone to the Harsco Corporation third quarter release conference call.
All lines have been placed on mute to avoid any background noise after.
After the speakers remarks, there will be a question and answer period.
Like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key.
Also this telephone conference presentation and accompanying webcast made on behalf of Harsco Corporation are subject to copyright by Harsco Corporation and all rights are reserved never.
A recording or redistribution of this telephone conference by any party are permitted without the expressed written consent of Harsco Corporation. We're.
Your participation indicates your agreement.
I would now like to introduce Dave Martin of Harsco Corporation Mr. Martin you may begin your call.
Thank you Shelby welcome to everyone. Joining us this morning, and I hope, you're well I'm, Dave Martin Apart scope with me today is Nick Grasberger, our chairman and Chief Executive Officer, and Pete Mine, and Harsco Senior Vice President and Chief Financial Officer. This morning, we will discuss our results for the third quarter and our outlook for Q4.
As well as horse goes key initiatives, we'll then take your questions before.
Before our presentation. However, let me mention a few additional items first our quarterly earnings release as well as in the slide presentation for this call are available on our website.
Second we will make statements today that are considered forward looking within the meaning of the federal Securities laws. These statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties that may cause actual results to differ materially from those forward looking statements for a discussion of such risks and uncertainties to the risk factor section in our most.
Recent 10-K and 10-Q the company undertakes no obligation to revise or update any forward looking statement last.
Lastly on this call we will refer to adjusted financial results that are considered non-GAAP foresi SEC reporting purposes. A reconciliation to GAAP results is included in our earnings release as well as the slide presentation now I'll turn the call to Nick.
Thank you, Dave and good morning, everyone. Thanks for joining us today.
The third quarter developed largely as we anticipated or on a consolidated basis with our environmental businesses improving sequentially.
While our rail business, which did not see a significant impact from kobin through Q2.
It's affected by weak demand and an unfavorable product mix.
Overall, EBITDA was consistent with our expectations, while cash flow was better.
Revenues in our environmental businesses, which represent more than 80% of total harsco revenue.
Were up 15% versus the second quarter.
Volumes were up in all ways categories led by hazardous medical waste reach.
Retail and industrial waste volumes were also up by double digits.
While steel waste or LS Ti was up high single digits.
Revenue was also up in the contaminated materials segment.
Well strengthen the dredge business offsetting weakness in our high margin Sorls business.
Which has been affected by softness in large nonresidential construction projects.
In the middle Atlantic and northeast regions.
Our key priorities have remained consistent for most of 2020.
Keeping our people safe during the pandemic preserving liquidity.
Capturing the value of the sole acquisition.
And executing our operational recovery plan in rail.
I'm very pleased with the execution on each of these critical initiatives during the third quarter.
The number of cobot cases across our employee population has remained steady at modest levels for several months and we have not experienced any significant disruption to our operations related to employee health.
The degree of employee compliance with our global Coburn related principles is quite high and.
And has served to counter the worrisome trends across the general populations of the more than 30 countries in which we operate.
[noise] people comment on our liquidity position in a moment, but I would like to recognize Pete and his finance organization.
Their outstanding management of our cash flow and liquidity position over the last several months.
Cash flow continues to be strong and is well above the 2019 level. Despite the impact of co bid on cash earnings.
The integration and value capture of that you still acquisition continues at a brisk pace.
The vast majority of our value actions had been launched and the corresponding benefits for the year will be ahead of our original plan.
These actions ranged from logistics and disposal optimization to various SGN, a and commercial initiatives.
This past week, David Stanton to clean Earth, President and I visited a number of our sites across the U.S.
It was energizing to again see first hand, the tremendous opportunities we have to grow the business and improve the efficiency of its operations.
The operational recovery program at rail is on track to deliver against its objectives by the end of the year.
The backlog in rail remains at record high levels. So the score program is oriented towards ensuring we have the appropriate capacity.
Competency and governance principles in place.
To deliver high quality products to our customers on time.
In terms of next steps, we plan to establish and sustain the lean based operating model required for a best in class supply chain and fulfillment capability.
Looking ahead, we expect our end markets to continue to improve throughout the quarter and into 2021.
With the recovery in our environmental businesses, leading that of our rail business.
Our Q4 outlook reflects these positive trends in both harsco environmental and didn't clean Earth.
We're not yet comfortable providing more specific guidance for next year, given the current economic situation.
And the potential impacts on our planning process.
In terms of management focus we will continue to execute our current programs and strengthen our balance sheet.
Together with the expected improvements in our end markets. These actions should building our foundation and enable us to take the meaningful next steps in our portfolio transformation.
I'll now turn the call over to Pete.
Well, thanks for the kind words, Nick and good morning, everybody.
So please turn to slide four in our consolidated financial summary for the third quarter.
In the third quarter horse goes revenues totaled $509 million and adjusted EBIT da totaled $59 million.
Our revenues increased 14% over the second quarter of this year, we eat with each of our businesses. Realizing a nice improvement in revenues from the second quarter. When we believe the impacts of the pandemic peaked for most of our end markets.
The sequential improvement in revenue ranged from a 20% increase at clean Earth to a 9% increase at harsco environmental.
Our third quarter adjusted EBITDA of $59 million is consistent with our expectations in August.
And is comparable to our adjusted EBITDA result in Q2, despite the unfavorable timing impact of certain expenditures, we discussed on our earnings call last quarter.
These incremental items, consisting largely of the timing of insurance and compensation related amounts negatively affected the quarter on quarter comps by approximately $10 million.
Otherwise underlying performance improved compared with Q2 as a result of volume growth driven by the ongoing economic recovery.
And strong underlying operating performance within our businesses include.
Including a diesel where margins improved considerably as our integration and operational improvement actions began to take hold.
And as you May recall Q3 was our first full quarter of owning you saw after we acquired it in April.
Relative to our expectations at the beginning of the quarter. Our results were aided by better top line and margin performance in harsco, environmental and lower corporate spending as a result of our ongoing focus on managing costs.
Our EBITDA in the third quarter of 2019 totaled $87 million the change year on year clearly reflects the ongoing impact of the pandemic on end market demand as well as the fact that the prior year quarter was particularly strong due to a favorable mix in both rail and clean Earth.
First goes adjusted earnings per share from continuing operations for the third quarter was eight cents.
And lastly, our free cash flow totaled $18 million in Q3 strong performance considering that this figure is net of approximately $14 million of tax related outflows that we had deferred from the second quarter.
This figure compares with free cash flow of $5 billion in the third quarter of 2019.
And year to date, our free cash flow is now $10 million positive significant significantly improved from 2019.
Capital spending discipline and improved working capital performance had been the main drivers of the improvement this year and should continue to be so for the foreseeable future.
Generating positive free cash flow is clearly an important focus for us and we expect to generate positive free cash flow in Q4 as well.
So now please turn to slide five and our environmental segment.
Revenues totaled $223 million and adjusted EBITDA was $40 million translating to a margin of 18%.
The EBITDA figure compares to $60 million in the prior year with the change driven by pandemic effects on the demand for services and applied products as well as related impacts on new site ramp ups.
Steel output at our customer sites declined approximately 6% on a continuing site basis compared with the prior year quarter.
Relative to the second quarter of this year Harsco Environmentals revenues rose, 9% on a similar improvement in steel volumes.
Adjusted EBITDA was unchanged quarter on quarter. However.
However, as I mentioned earlier the comp to Q2 was negatively impacted by the timing of expenses, which totaled approximately $5 million for IGI.
So I believe these results again illustrates strong performance by our harsco environmental team and their ongoing focus on operational excellence and financial discipline in controlling operating expenses.
[noise] Harsco environmental is free cash flow totaled $32 million in the quarter and now total $64 million for the year.
This year to date figure compares with free cash flow of $10 million in the prior year.
The improvement during 2020 has largely been driven by lower capital spending and cash generated from working capital as I mentioned earlier.
Next please turn to slide six to discuss our clean Earth segments.
For the quarter revenues were $194 million and adjusted EBITDA totaled $20 million.
Compared to the third quarter of 2019, our dredged material processing business had a strong quarter.
The inclusion of east will offset the volume pressures linked to the pandemic in our legacy clean Earth Haz waste business.
Our soils business was impacted by less favorable mix and delays in non residential construction projects again due to the pandemic.
Relative to the second quarter of 2020 revenues increased roughly 20% what he saw and legacy clean Earth experiencing similar improvements.
By line of business. The sequential revenue growth was most significant in medical and dredge material processing, followed by industrial and retail hazardous waste.
Yes, all contributed nearly $130 million of revenue in the quarter.
Great to see the salt business bounce back from Q2, when many medical facilities and industrial plants as well as a good number of retail stores were closed and.
I believe this illustrates the recurring any essential nature of its revenues in its resilience during atypical business cycles.
Further you suppose margin performance improvement was also very positive in the quarter additions.
Additional volume helped in the quarter, but I believe this result is more importantly, a direct positive reflection on the improvement initiatives that we've only begun to implement.
You saw us run rate EBITDA as a result is now above pre acquisition levels despite depend Dennis.
Last quarter, I mentioned that we expect to realize approximately $5 million of benefits in 2020 from our initiatives today I'm confident we will exceed this target.
And as a reminder, the major improvement levers, we're pursuing our disposal optimization site productivity inbound and outbound logistics procurement and commercial initiatives.
Although we still have some work to do in order to achieve our goal of doubling he saw as EBITDA within three years, we are off to a great start.
Lastly, on the clean Earth segment free cash flow and cash conversion remains impressive.
The segments free cash flow totaled $17 million in the quarter and year to date. It now stands at $38 million versus adjusted EBITDA of $42 million.
So now please turn to slide seven and our rail business.
Rail revenues increased to $93 million, while the segment's adjusted EBITDA declined to $5 million in the third quarter.
The change in EBITDA relative to the prior year quarter can be principally attributed to a less favorable mix across all product categories, and lower aftermarket and protracted volumes due to the pandemic headwinds affecting our customers, which became more pronounced during the quarter.
These impacts were partially offset by lower as DNA spending.
While economic conditions related to the pandemic clearly hit the low point in Q2 for clean Earth and environmental that wasn't the case for rail as the end markets continue to fuel pressures from pandemic related headwinds on freight and passenger rail demand.
As we started to see early this quarter. This has created some deferrals of our customers capital spending versus their original plans and accordingly, the demand for short cycle products across all business lines in rail was soft.
While rail traffic and ridership has started to improve the outlook is still fairly volatile given the pandemic headwinds.
Furthermore, our business generally lags, leading indicators such as traffic and ridership by a few quarters we.
We have some important customer discussions in the coming weeks about their forthcoming capital spending plans and are cautiously optimistic that we will see some further improvements late in the year in early 2021.
No bright spot continues to be business development in our backlog, where we continue to see opportunities to bid on larger longer term contracts. Despite softness in the short cycle market.
And we've had a number of notable sizeable wins during the quarter.
These wins included a follow on option contract with the New York City Transit authority to supply them with additional vehicles in a new contract with the Chicago Transit authority to supply them with snow removal vehicles.
As a result, rail's backlog remains robust totaling more than $450 million at the end of the quarter.
So before moving to our outlook on slide eight let me comment on our balance sheet.
Our financial flexibility remains strong our leverage as expected stood at 4.5 times and our liquidity totaled $325 million at the end of the quarter.
Reducing our leverage is a top priority for us and our goal remains to reduce our leverage to below two and a half times within a couple of years.
Now, let me turn to the outlook on slide eight.
With the exception of our rail business, our visibility and confidence has continued to improve in recent months and as a result, we believe we're in a position to provide some quantitative guidance for the fourth quarter.
As you all know the current economic environment continues to be fluid and recent Covidien section trends are not favorable.
However, with this in mind and based on the current market environment, We see fourth quarter total harsco adjusted EBIT da EBITDA, ranging from 58 million to $63 million.
Business conditions are expected to improve modestly for clean Earth and harsco environmental during Q4 relative to the third quarter.
For these two segments Q4 margins are projected to be stable versus the third quarter.
Rail results in the fourth quarter are currently expected to be similar to the third quarter performance in corporate costs are expected to be modestly above Q3 levels.
Also we expect our free cash flow to be between 20 and $25 million in the fourth quarter and this outcome would place our free cash flow for the full year north of $30 million.
Now as I mentioned earlier this outlook does not contemplate any meaningful impact to our business.
How many new lock down to restrictions, which may be implemented by state or national governments as a result of negative koby developments.
Nonetheless, despite the unusual conditions, we've all experienced these past few months I'm very pleased with the performance disciplined and focused on execution by each of our businesses and keeping our people safe while delivering our strong results to date and expect this to continue into the fourth quarter and into 2021.
This concludes my prepared remarks, and we will turn the call back to Shelby to open the line for questions.
As a reminder, if you would like to ask a question you may do so by pressing Star then the number one on your telephone keypad again that is star one if you would like to ask a question well pause for just a moment to compile the Hyundai roster.
Your first question comes from Larry Solow CJS Securities.
Good morning, guys. Thanks for taking my questions.
Maybe just on the environmental piece can you, maybe just discuss sort of.
Sequentially through the quarter or what your customers are seeing terms or put steel production utilization.
Obviously remains down but as it does it still continues to steadily improve and how about I mean on the cost side do you have any more.
Anticipated cost cutting measures or other offsetting things to enough to offset some of this impact.
Yeah.
Yeah. So overall I think we did see a fairly steady improvement and.
And production levels are a steel company is really around the world some regions of course stronger than others.
Capacity utilization, which was down around 60% earlier in the year I think is probably up around 70% or so at this point so.
That was a bit a bit better than we anticipated.
In the third quarter.
We don't expect that type of lift that magnitude in Q4, but nonetheless, a continued improvement.
In terms of cost reduction, Larry we do actually and environmental expect to continue to take out costs.
<unk>.
We will be talking about that more as we provide.
Full guidance for 2021.
But we believe there is further opportunity both in terms of.
At the site cost as well as as Tonight.
Okay, and then just switching gears real quick on the rail side I know you know directionally not a surprise in terms of.
And where the impact is coming from the North American side, just a little bit surprised on the on the magnitude or or less improvement year over year.
The square program advancing and seemingly international piece of the business remaining pretty much intact. So I'm just trying to yeah and touch it sounds like we're not going to get much improvement in Q4. So is the is a drag on that is it purely you know north American side or have.
Some of the deliveries that are that were scheduled for the back half of this year on the international side also been delayed a little bit.
Yeah, it's both Larry clearly the core U.S. market is down for our higher margin.
Equipment and also some of the shorter cycle aftermarket type opportunities, but but we've been tracking and assuming a throughout the year that some some high margin.
Technology transactions would take place outside the U.S. and this looking as though those will be deferred into 2021.
With respect to score I think the big negative impact from a manufacturing standpoint last year was in Q4.
And we certainly expect to see in Q4.
An EBITDA on a level consistent with Q3 and much above Q4 of last year.
Okay, and then just switching gears real quick just on that you saw it sounds like now on clean Earth you saw it sounds like maybe a little bit.
From my expectations, maybe integration a little bit faster than expected just to confirm that you said that actually where we are for the [noise].
The pre pandemic level. So in other words, we're sort of pacing no no 10 million a quarter EBITDA 910 million a quarter is that correct or ready and useful.
Yes, that's correct and that's that's the run rate, we're actually doing better than the pre covered levels at the EBITDA level and that's that's the appropriate run rate there.
Okay. Good all right. Thanks, so much appreciate it.
Yes.
Your next question is from Jeff Hammond of Keybanc.
Hey, good morning, guys.
Jeff.
Okay. So just a clean Earth I think you said you saw was a 130 million in revenue contribution is that right.
Yes, correct.
Okay. So if I look at the base business. It looks like it was still down like mid twenties, the base clean or if I'm just wondering what the big drags ours. It is it simply that the soil business or what's going on with the hazardous side of of cleaner.
Well, it's a combination of both the by far the biggest pieces this oil business, Jeff and it's the related to the construction starts and delays that we experienced from the pandemic, but certainly some to some degree the as waste business, which is largely equivalent to that you saw manufacturing industrial businesses had felt particularly during the second quarter the headwinds.
Associated with the.
The pandemic.
Okay, and then what's what's the trend in the in the clean Earth hazardous business kinda into fourth quarter.
Trending upward just consistent with the the rest of the salt business in all lines of businesses are trending.
Steadily upward from where they were in in Q2.
The soil business, albeit much slower, but the haz waste business more more more robust more pronounced.
Okay. So as we kind of frame for Q, it seems like and environmental gets a little bit better sequentially.
You are kind of flattish on EBITDA for rail and then.
How should we think about cleaner sequentially.
Should should be modestly better as well the combined clean Earth, you sold businesses will be a modestly improving in Q4 versus Q3.
Okay, Great and then.
So just back on the rail margins it sounds like.
You're you're happy with the score progress, it's just more a part of that.
Parts and service mix issue in the near term.
Yes, Thats correct, Jeff I mean, clearly as I highlighted in my remarks that.
The follow on to the score program.
It will be.
Don't building that.
Lean operating model that that will serve to sustain.
The improvements made in the score program and that's that's where in my view the rail business operationally has fallen down in the past, where we've made improvements, but dave not not been sustained.
So I think we're very happy with the with the score program, but at this point shifting our focus more to how best to sustain.
Those improvements that we've made.
Okay. Appreciate it guys. Thanks.
As a reminder, if you would like to ask a question you may do so by pressing star one you're.
Your next question is from Rob Brown of Lake Street capital.
Hi, Rob Hi, good morning.
First question is on the on the rail business I think you talked about aftermarket being a little weaker how does that business perform typically.
Typically down turns is that shut off kind of quickly and then turn on quickly or would it be seen in the past about how quickly that can come back.
Yeah Yeah.
Certainly not to the extent that the equipment business as the the aftermarket challenge now is actually I'll say somewhat less than it is in our technology business, which is another short cycle.
Segment within the rail business.
And tends to be tends to be quite high margin as well so while aftermarket is a a bit softer.
The the change relative to previous expectations is really been the push out of some of these higher margin technology projects that that we expected in Q3 and Q4.
Okay. Okay. Thank you for that detail.
And then on the Salt business.
You talked about kind of a tracking.
Starting on your early new journey, but tracking to that two times the margin in a few years.
Could you survive in a kind of what you think that margin can get to in the I guess overall cleaner business and.
What are the.
How does that ramp is it sort of an even ramp or or does it in a backend loaded in terms of seeing seeing results from these efforts.
Yes, I think we're going to see a fairly accelerated rate in terms of margin improvements I mean, we we were very pleased with the results this quarter and just just in in one quarters worth of activities in terms of the margin lift, but we expect to see that continue on through 2021 and weak when we talk about doubling the EBITDA in the three year.
As we're really talking about getting to that run rate by the end of the second year, which would imply margins three 400 basis points higher than what we've experienced this year.
Okay. Okay, great. Thank you I'll turn it over.
As a reminder to ask a question. Please press star one that is star one if you would like to ask a question.
Your next question is from Chris how of Barrington Research.
Good morning, everyone.
Hi, Chris.
Hi, good morning.
Most of my questions have been taken here, but just following up.
On some of the comments regarding you saw integration.
Things are going very well to plan ahead of plan.
As we look at the performance to date.
What is attributable to perhaps a pull forward of expectations versus.
And acceleration you mentioned that accelerating rates.
Margin improvement here.
What's what specifically is tracking ahead of plan in regard to this integration.
Yeah, I think it's both an acceleration as well as as we've commented on before.
You that the opportunities might might be somewhat greater than we felt originally.
What we've seen thus far is probably more of an acceleration.
But I think as we look out for the next two or three years.
You know our expectation on the benefits of the transaction has if anything improved.
That's great yet it seems that at the time.
These all acquisition there were some current concerns over a some of the different parts of the business in regard to cyclicality, but it's held up well.
In this environment.
Tracking ahead of plan as we look outside of that to the legacy business, which has been more impacted.
By this pandemic environments.
How do you anticipate that mix being sustained.
Who knows with this virus, but as we look into the early part of next year.
How this could change.
Eventually to your benefits as we move into the latter part of fiscal year 21.
I think it's Pete commented the.
The portion of the legacy clean Earth business that is really most concerning now is is the soils are contaminated materials business, which includes.
Dredging dredging is is.
Yes.
Is is improving at a pretty fast pace those projects have been approved and.
And I think that the backlog there for us is a very attractive but much less so on the soil side and we have a kind of a base load of volume that we we process and each plant, but above that we typically see.
Good volumes from large.
Non res is kind of infrastructure projects in our core markets of the.
Mid Atlantic and northeast and and those generally are publicly funded and many of those have just been put on hold.
And so that that's that's been the most concerning.
A component of the of the clean Earth business, but.
We would expect those two to come back online moving into 2021.
Okay understanding now this is my last question understanding now that.
Priorities.
Debt reduction maintaining your cash flow generation levels.
As we look into cleaner if markets anything there as far as the fragmentation within the market.
That could be a near term opportunity.
Understanding capital allocation priorities.
Our of the upmost importance now but is there anything on the M&A side, where you can.
Pickup a little tuck in here in.
In this kind of environment.
Environment, that's impacting the legacy cleaner.
Yeah, well certainly one of the the many factors that attracted us to to the to the hazardous waste segments and the purchase of clean Earth and diesel was the the fragmentation in the market and the opportunity to continue to scale.
A platform to some size overtime, certainly well over a billion dollars and that's still very much.
Our intense we think its a.
The availability of such businesses.
We'll we'll be there when we're ready.
But again, if you look at our capital allocation priorities and I think they need to see some of these markets bounce back.
I think it's unlikely in 2021 that we would execute anything of size could there be a tuck in or two that might be attractive and actionable perhaps.
But I think generally our mindset is 2021 is a another year of executing on the internal programs and and reducing debt.
Okay. Thanks for all the color I appreciate it.
Yes.
Your final question is from Michael Hoffman of Stifel.
Nick Hey, Dave Hope everybody as well.
Yeah.
Nick you can make on leverage.
For the based on the EBITDA, you've given us how do you how would you frame what your leverage would land that we are at the midpoint of your EBITDA by inference, you basically have given us of Fivetwenty because it just pick the first nine months and at the fourth quarter.
Yes, it will be about the same level. We are at the end of this Q3, Michael which is about four and a half times I.
I think we've talked about that just because.
Well below the covenants right, but the expectation is to move that steadily downward as you know.
Just a few years right.
And then Nick one of your strategic objectives and.
Steel side is to eventually when your your business from the logistics revenues.
And with a variety of strategies are approaching that how is that progressing as far as your efforts to engage both your customer and potential.
Outsourcing of that work.
Well I think we're still very early in that Michael.
It's a it's difficult to to execute on individual contracts and advance of of them.
[music].
In advance of the renewal process. So.
So it's.
But it's it's early I think the most important.
Accomplishment on that front is the the the changing mindset amongst our leaders in that business and the commitment to.
Just the business generating a cash flow margin every year that is a much more akin to a true environmental business, that's the focus and their different paths.
To get there one of them is what you mentioned.
Shifting our focus.
Overtime more to the less capital intensive.
Truly environmental services for our steel customers.
So if I followed up on that what what do you think that target margin. So as a percentage of revenue should be.
Well, so today, it's about 70% environmental 30% not environmental.
I think our long range plan would would get that two to 85 or 90% in the next few years.
Okay first for you.
And then regarding steel.
Q you thought the year ex China would be down about 12, 15%.
Do we still think that that's sort of the path.
That's about right I think is down about 10%, yes, a little less a little less than what we thought about at that time, Michael its probably 10% to 12%.
So clearly the environments being helped by the return of auto production in some global level of.
Construction activity and what have you.
Right Okay.
Clean Earth.
You're the if I take soils out I get that you know that you need these infrastructure projects to start.
Backup, but if it takes soils out of the this conversation and focus on industrial waste hazardous waste both.
Both the retail medical side as well as the industrial side.
Does the plan as Youve laid out your EBITDA suggests you're back to.
Thanks.
Well take <unk> for Q X will be back to pre co the levels of activity given the low level of improvement in industrial production, that's going on in the economy.
Yes, not quite Michael it's certainly working towards that but we're not we're not quite there in Q4 I think it is going to we will see that probably till maybe at the end of the first quarter and 21 or second quarter.
Okay.
And then your free cash flow year to date of the segments of about 80 million, but the guidance.
For the three year to date actual reported its about 10, so what I'm looking at about $70 million of corporate is that sort of cash spend.
I'm curious about sort of opportunities to improve that number.
Yes, let's sit in interest and taxes of course and corporate cost but.
We're we're looking at all opportunities in fact, we have some opportunities. There. We're looking now in terms of pension payments that we have the opportunity to deferred to future periods. So there's a number of things that were pursuing to to help with that.
Okay.
And then lastly on the slow side. So some of the things like the BDI data is starting to improve which suggests that non res construction may have found the floor.
Are you getting any sense of that even from your customers is from a standpoint of at least talking about the possibilities of schedules.
Yeah, I think so I think that's absolutely the case Michael.
At the worst is behind us here and that the.
The restart of some of those projects is just around the corner.
Okay.
Terrific. Thank you very much.
Thank you Michael.
[music].
There are no further questions in queue Mr. Martin do you have any closing remarks.
Thanks, Shelby and thank you for everyone for joining this call feel free to contact me with any follow up questions that you may have using the contact details provided that at the top of today's earnings release, and lastly, again, we appreciate your interest in Harsco and look forward to speaking with you in the future have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
[music].