Q3 2020 Astec Industries Inc Earnings Call
Hello, and welcome to the Astec industries third quarter 2020 earnings call. As a reminder, this conference call is being recorded.
It is my pleasure to introduce your host Steve Anderson Senior Vice President of administration and Investor Relations.
Thank you Mr. Anderson you may begin thank you and welcome to the Astec Industries third quarter 2020 earnings call. My name is Steve Anderson and joining me on today's call very rough below our Chief Executive Officer, and Becky Weinberg, our Chief Financial Officer in just a moment I will turn the call over to Barry to provide comments and then.
He will summarize our financial results.
Before we begin I'll remind you that our discussion. This morning may contain forward looking statements that relate to the future performance of the company.
These statements are intended to qualify for the safe Harbor liability established by the private Securities Litigation Reform Act.
Any such statements are not guarantees of future performance and are subject to certain risks uncertainties and assumptions.
Factors that can influence our results are highlighted in todays financial news release.
And others that are contained in our filings with the FCC.
As usual, we ask that you familiarize yourself with those factors.
In an effort to provide investors with additional information regarding the company's results. The company refers to various gap, which is U.S. generally accepted accounting principles and non-GAAP financial measures, which management believes provide useful information to investors.
These non-GAAP financial measures have no standardized meaning prescribed by U.S. scale, and therefore are unlikely to be comparable to the calculation of similar measures for other companies.
Management of the company does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.
Comments made during today's call, we'll refer to non-GAAP results and a reconciliation of GAAP to non-GAAP results are included in our news release and appendix of our slide deck.
All related earnings materials are posted on our website that W. W. W. Astec industries Dot com.
And before I turn the call over to Barry I'd like to remind everyone of our upcoming virtual 2020 Investor day on December 10th now, let me turn the call over to Barry.
Thank you Steve.
Good morning, everyone and thank you for joining us on the call. This morning to discuss our third quarter 2020 results.
I continue to be proud and impressed with the hard work dedication of our team members throughout the pandemic.
As you can see from our results. Our team is focused on operational excellence and execution to significantly contribute to ensure the success of our organization. During this time.
We continue to prioritize the health and safety of our employees suppliers and customers as we navigate through this and never stop in terms of our focus on driving long term profitable growth.
I'll begin with key highlights from the quarter and then provide an update on our operations I will also discuss what we're seeing in terms of demand in our supply chain before turning the call over to Becky for details on our financial results.
Also highlight progress made on our strategic transformation plan and then open the call for Q and a.
Starting on slide four during today's key messages first as a result of the actions that we've taken over the past year to transform our company and our increased focus on driving operational excellence, we were able to drive another quarter of strong performance and improved quality of earnings with a 13% increase.
He's in adjusted EBITDA, and a 170 basis point increase in EBITDA margin compared to the prior year, despite the challenging macro environment.
Second in the quarter customer demand remained resilient as our products are essential for building infrastructure and are used to facilitate the transportation needs of our communities.
By recent conversation with some of our key customers confirmed that while they continue to deal with near term uncertainties, but also continued demand AD Tech solutions and will continue to support them remain vigilant as we help them navigate through the ongoing pandemic.
Third given our focus on operational excellence, we remain well positioned to execute in all market conditions with a strong balance sheet and liquidity incur.
Including importantly, a net cash position.
We also saw further success in the quarter and improving our working capital turns and we'll remain focused on further improvement.
Fourth during the third quarter, we continued to make progress on our strategic transformation and to simplify focus and grow pillars with the completion of the sale of the remaining Jeff go assets and the acquisition of Conoco MH.
The integration of Cardica, MH is going well and as a result of the acquisitions, we have a stronger infrastructure solutions portfolio with the ability to provide our customers with access to the most robust lineup concrete products and infrastructure industry.
Importantly, we seek not only to be strategic and disciplined acquirers, but also strong integrators of businesses.
We continue to look for opportunities to support a rocky road strategy and build upon our strong foundational product lines.
Lastly on this slide throughout the pandemic, we've demonstrated agility and flexibility to respond to our customers' needs and we can use to do so and then you know economic scenario.
Our ability to execute against our strategy and drive operational excellence across the organization has served us well in this environment.
As a key driver of our success.
We will continue to focus on the factors within our control and build upon the strong foundation that we have created here at Astec.
With that let me turn to slide five as a reminder, as part of our continued transformation beginning this year. We went from three segments did too.
Our revenue mix during the quarter was 35% material solutions and 65% infrastructure solutions.
The key here is that we refer to our business as being able to serve a strategic value chain, but it's really from rock to road, including our two recent acquisitions.
On slide six we provide an update on our operations. We continue to have as many of our employees working from home as possible with intention to gradually bring back the team as a covenant 18 situation alleviates.
Currently approximately 30% of our office employees are working remotely.
Prior to the pandemic, we had implemented Microsoft teams across the organization and our workforce has adapted well to using the system over the past several months of remote working.
Regarding our facility all about sex facilities around the globe are fully operational with no material interruptions during third quarter, and we maintain the ability to flex operations as needed to quickly adapt to the changing environment.
Now turning to slide seven I will touch on some business dynamics that we're seeing and hearing from our customer conversations.
Our ongoing dialogue with customers is just that they are doing well with a strong backlog through 2020 and into 2021.
The recent 12 month extension to the fast Act has provided our customers with increased visibility and confidence.
Patently, we continue to see bipartisan support for us infrastructure construction and look forward to continuing to service and support our customers as they required critical aspect solutions.
On the demand front many of our customers remain cautiously optimistic for a rebound what's the pandemic chain.
With respect to our supply chain today, we have not experienced any significant disruptions that we are constantly maintaining discussions with our suppliers to identify and mitigate risks.
We have also expanded the depth of our supply chain to support him risk mitigation efforts.
Overall during the quarter, we continue to make significant progress in our results demonstrate good traction on our side.
Dziedzic transformation with a 2% increase in adjusted EBITDA in the 60 basis point expansion in the adjusted EBITDA margin. Despite the decrease in sales as our aftermarket parts sales remained strong and improved slightly from the prior year.
Our third quarter performance is a direct result of the restructuring initiatives. We started in 2018. In addition to our increased focus on operational excellence and strategic procurement.
Before turning the call over to Becky I'd like to highlight a couple of initiatives that we have recently adopted here that to help support our culture of continuous improvement and operational excellence.
First I'd been hosting one hour meetings with a small group of different team members across the organization each week to discuss improvements that can be made to further enhance our culture of continuous improvement.
These conversations have been extremely insightful and we are already implementing some of the suggestions from these meetings and I expect that trend to continue.
We're also gaining strong traction across the organization for winning behaviors to support our culture initiative.
These behaviors include open and honest communication dry for creativity customer centric innovation I want to ask second although we do.
Hi, part of the culture here at Astec and I'm excited to share some more details with you at the upcoming Investor day regarding our initiatives to drive operational excellence and grow across the organization.
Now with that I will turn the call over to Becky discuss our detailed financial results.
Thank you Barry and good morning, everyone I'm pleased to join you on today's call.
Beginning on slide nine third quarter, adjusted revenues decreased 9.5% to $231 million compared to the prior year quarter.
Excluding the impact of foreign currency revenue decreased around 8%.
Equipment sales decreased 16%, while part sales as Barry highlighted increased slightly compared to the prior year period.
Our backlog decreased 10% to $219 million that quarter, and driven by lower material solutions and infrastructure solutions orders, which were down around 9% and 11% respectively.
Lower orders were driven largely by continued COVID-19 uncertainties.
On a positive note we did see an increase in equipment orders from our North American dealer order writing program in September.
The third quarter, adjusted EBITDA increased 2% to $11 million compared to $10.7 million in the prior year period, and adjusted EBITDA margin improved 60 basis points to 4.8% compared to the prior year period.
The margin improvement was driven by favorable mix and our ongoing transformation initiatives.
Adjusted EPS Ginnie expenses increased nearly 3% on a dollar basis driven by acquisitions.
In relation to the company's efforts to simplify the organization during third quarter, we incurred $3.9 million, a pre tax restructuring and other costs or 13 cents per share net of taxes.
These items were excluded from adjusted earnings per share and the restructuring charges are related to asset impairment inventory write down I read that.
Auction and Labor force and the closing of our Mequon, Wisconsin facility.
No we've reduced our head count nearly 12% year over year.
Adjusted earnings per share rose, 18% in the quarter to 20 cents compared to 17 cents in the third quarter of 2019.
Overall, we reported strong third quarter results, despite the challenging macro environment.
Moving on to slide 10.
We highlight the key drivers of our year over year adjusted EBITDA margin expansion.
Adjusted EBITDA margin expansion of 60 basis points was primarily driven by a reduction in headcount and related savings. In addition to savings from supply chain management and other transformation savings.
This was partially offset by acquisitions and increases in corporate and other expenses as we are investing in IP and ramping up back office support.
On slide 11.
Our infrastructure solutions business revenue decreased by 3% to $151 million in the quarter, driven primarily by cold at night teen related customer uncertainty.
Adjusted gross profit increased 4% to $32.2 million and gross margin expanded 150 basis points to 21.3% driven by strong parts margins, particularly in the asphalt plant equipment.
We continued to execute on cost savings initiatives and further rightsize our business during the quarter with a large focus on reducing and controlling SGN day.
We remain focused on operational excellence to drive efficiencies as well as limit discretionary spending such as travel and tradeshow participation going forward.
We continue to support our customers. During this time as we are seeing solid demand for highway in road building construction products across the country.
As Barry noted, we are seeing increased visibility and confidence in the industry driven by the recent 12 month extension for the fast Act. There is cautious optimism that a larger infrastructure bill will provide a strong catalyst for the industry.
Turning to slide 12.
Our material solutions business revenues decreased 19% to $80 million compared to the same period, a year ago, driven primarily by COVID-19 related uncertainty.
However, as I just mentioned, we did see a bump and equipment orders in September.
Adjusted gross profit declined 0.7% to $20.7 million, while gross margin expanded by 480 basis points to 25.8% driven by Rightsizing activities largely related to the closure of our Mequon, Wisconsin site.
We continue to make progress on our material solutions 2020 transformation plan in the quarter as we completed the closure of our backlog, Wisconsin facility.
Expect the sale of this property to close by early 2021.
As we have noted on prior calls this closure will enable us to leverage our manufacturing footprint more efficiently as the products or transfer to other plants.
This is in line with our ongoing strategy to move key products to our South Africa, Brazil, and Northern Ireland plants in order to lower our cost basis decrease our overall manufacturing footprint and manufacture closer to our global customers.
Overall improved earnings performance in the third quarter demonstrates the traction of our initiatives to rightsize operations to market demand.
We remain flexible and committed to simplifying and focusing the business to continue to drive improved profitability.
And on Slide 13, I won't go over the details, but we highlight the year to date results and provide some color for your reference.
Moving on to slide 14.
We continue to maintain a strong balance sheet with a minimal debt net cash position of over $108 million give.
Given the current environment, we remain focused on strong liquidity and cash preservation to withstand sustained periods of market uncertainty.
Oh, no accounts receivable is down 15% year over year due to decreased sales and a more focused effort on collections overall, we have available liquidity of $260 million, including nearly 109 million of cash on hand, with only 900000 in total debt.
As of September Thirtyth 2020.
We continue to make progress on our inventory reduction efforts as total net inventories decreased $95 million compared to third quarter year to date 2019.
As Barry noted, we remain focused on maintaining a strong and flexible balance sheet with ample liquidity and believe that this will enable us to stand up for a variety of economic situations if needed.
Now on slide 15.
Just a reminder, on our capital deployment framework, which is consistent with what we have previously shared we continue to have a disciplined approach to deploying our capital when we consider the various avenues of capital deployment.
We do so in the context of our long term strategic objectives unrelated revenue earnings and cash flows in order to maximize shareholder value.
Our capital allocation priorities remain unchanged in the current environment on internal investments in property plant and equipment, we will continue to target greater than 14% return on invested capital for new investments.
Regarding acquisitions.
Our only considering strategic acquisitions that align with our growth strategy and meet our internal financial criteria.
Our strategy for M&A is to fill gaps that we see within our customer supply chain as we look to grow regionally in attractive markets. We also seek to maintain the number one or two position in the product lines that we have we believe that M&A is a mechanism that will potentially allow us to accelerate our investment in technology and innovation.
Nation.
Importantly, we remain committed to funding the dividend, we have not repurchased any shares since 2018 and do not expect to do so in the near term out of an abundance of caution to preserve our financial flexibility.
As a reminder, on slide 16.
We summarize our strategic and disciplined approach to M&A, which helps to support our growth pillar.
On slide 17, we highlight a recent example of this strategy being executed with our two acquisitions in the third quarter.
It's buried noted the integration of Conoco and B M. H are going well and both businesses have strengthened our infrastructure solutions group by providing our customers with access to the most robust lineup concrete products. In addition to being a strong acquirer. We have also placed a large focus on being strong integrators.
We look forward to providing you more updates on the integration at Investor Day.
Turning to slide 18.
Our downturn playbook remains the same this summarizes actions that we've already taken and additional levers that we can pull if necessary since the onset of the pandemic. We have already implemented several cost reduction initiatives across the business, including re prioritization of investments and a reduction of headcount.
Discretionary expenses.
We are prepared to take further cost actions if necessary and provided examples of some of the additional levers that we can Paul.
Finally, as a reminder, we previously identified certain material weaknesses in our internal controls and have already implemented significant measures to remediate control deficiencies.
During the third quarter, we continue to add measures and enhanced controls. Accordingly. In addition to what we highlighted on our last earnings call. We.
We have further segregated duties to support our eye to function. We believe this along with prior actions we have implemented will be effectively remediate most if not all the material weakness as previously identified.
With that I will now turn it back over to Barry for his closing comments.
Thanks, Becky now moving on to Slide 19, I'll provide a quick overview of the three pillars of our strategy for profitable growth simplify focus and grow first.
First simplify the third quarter marked another period of successful execution on our strategies to leverage our scale reduce organizational complexity consolidate rationalize our footprint and product portfolio.
I'm proud of the progress our team has made to simplify our business and drive efficiencies across the portfolio.
Second focus we continue to strengthen our consumer centric approach driving commercial excellence and streamlining processes and instilling a performance based culture.
Finally grow we are reinvigorating innovation, leveraging technology to unlock internal synergies, while also enhancing the customer experience.
Exploring global growth opportunities and carefully allocating capital to maximize shareholder value.
We have made great progress so far this year within these three pillars, especially given the current environment.
I'm confident that our team will be able to continue to execute on our strategy regardless of the economic environment.
Slide 20 outlines some of the major milestones we are executing against on our transformational journey and the progress we have made to date.
Under simplify we have achieved two milestones during the quarter to consolidate our footprint can streamline our portfolio.
First we completed the closure of our Mequon, Wisconsin facility. The last day of production occurring in August.
Second we completed the sale of the remaining Jeff go assets.
Under focus as I mentioned in my earlier remarks, we were able to further streamline our portfolio during the quarter with the sale of the remaining jeffs core assets to align with a Rocky road strategy.
We continue to place a strong focus on driving operational excellence across the organization, we are gaining strong internal attraction on our initiatives.
Our product portfolio continues to be evaluated with our ongoing rationalization initiatives and we look to drive further optimization over the next several quarters.
Under grow we completed the acquisition of Conoco and be amazing third quarter, both of which significantly strengthen our infrastructure solutions business.
We continue to place a large focused on innovation and technology, particularly related to telematics and are confident that our efforts in this area will support future organic growth across the businesses.
Furthermore, we also just acquired Rockwell automation on Monday November 2nd it's another strategic acquisition that supports our technology leadership vision to ride value added solutions across the Roc and ROE continuum.
Russell automation had been at Astec pardon for 10 years and develop the Guardian system for our Rotex equipment as well as a job site management system that will benefit our customers. It has conducted equipment. Other telematics platforms importantly from a cultural standpoint brought home automation is also strong fit with the company motto of customer service is every.
Thanks.
With the expected cost savings from the actions we have taken we plan to reinvest in our business to drive profitable growth and maximize shareholder value.
We remain focused on improving our working capital turns.
I'll conclude on slide 21, with our key investment highlights which remained consistent.
Our team continues to execute and make progress in our transformation plan to simplify focus and grow the business I'm pleased with the dedication and hard work that I see every day across the organization.
Our leadership positions with an attractive niche markets superior customer service and culture of operational excellence have truly positioned us for success throughout this challenging environment and will continue to drive our success in the future.
Our success is also supported by a strong group of leaders to foster a culture of accountability and continuous improvement.
As we continue to navigate through the pandemic, we remain cautiously optimistic about the future we remain well positioned to face. The challenges ahead of us with a more efficient streamlined centralized organizational structure strong balance sheet and ample liquidity.
We also remain flexible and are ready to adapt so that we can support our customers in various economic demand situations.
I'm excited about the future prospects as we continue to execute against our strategy to simplify focus and grow the business I look forward to sharing more details with you at our virtual Investor day on December 10th.
With that operator, we're now ready to open up the call for any questions.
Thank you at this time, we'll be conducting a question and answer session, which.
Just wanted to ask a question today. Please press star one from your telephone keypad and the confirmation tone indicate your line is in the question queue you.
Let me first start to few late to move your questions from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the sarkies one only so we poll for questions.
Thank you our first question will be coming from the line of Mig Dobre with Robert W. Baird. Please proceed with your question.
Thanks, Good morning, guys.
Hey, good morning, how are you doing.
You know I'm doing okay.
It's an interesting day today, let's just say that I'm very and I'm actually not going to ask you an election related question to kind of start us off here, but rather.
I'm wondering if you can give us a little more detail on the backlog in the infrastructure solutions.
Has there been any contribution to the backlog from from your recent acquisitions and if so can you can you quantify I don't know if I missed that in your slides somewhere to disclose that already.
Yeah, that's the backlog.
As far as contribution from the acquisitions I would say, yes, we have some we've had the concrete plants space has been one that's been pretty active for us we.
We did not identify how much of the backlog was attributed to that product line, but we feel good about the again the activity in the marketplace since we've actually.
Finished the transaction so they are contributing to our backlog.
And then they make I also want to say Oh, we're looking forward to participating in next weeks of Baird Industrial conference as well so.
Okay, well. Thank you for that we're looking forward to having you there.
And I'm sorry to press you on that but I'm looking at we're trying to do the math here on on your orders your implied orders and infrastructure.
And you know, they're up and I'm trying to understand how much of that is sort of the core business well relative to things that you might say.
You might have acquired.
Didn't you at least talk about talk about that I mean, your is your base business. Excluding the recent acquisitions growing in terms of order intake in the quarter and going into the fourth.
Yes, no the the growth in the backlog and infrastructure solutions is primarily driven by the asphalt plant product line.
So we've the last couple of months have been very active there we've been very pleased with that order flow. So that's what I can give you there makes its basically our core business legacy business.
I see and then.
Thinking with this theme can.
Can you help us understand the impacts.
From these acquisitions on on your gross margins in the segment.
Or you know accretion or however, you really sort of.
However, you want to frame this.
Yes, I would say in the quarter the impact is positive, but its not material mix. So we're we're not going to comment specifically on that.
We can give you some more detail as we get into the.
Investor Day, which we have scheduled in early December by that time, we'll have a little bit more time with these acquisitions that we can give you a little bit clearer picture in regards to what their contribution really is.
But you are unable to move to the comment on gross margin, where these businesses are relative to the segment today.
I guess, it's about 3% on the whole year, we don't have the specific right in front of us on the quarter, but it impacted our outlook for the full year is about 3%.
Right I mean, I wasn't talking about the quarter I'm just wondering about the gross margin for these businesses, just said that we layer and layer them in properly in our estimates Becky that's what I'm getting at.
Yeah, I like on a gross profit basis, the improvement to our full year will be 3%.
Okay.
And then I guess my my follow up here is.
Trying to understand how you're thinking about.
The business sequentially into the fourth quarter relative to the third your performance here in the third quarter has been has been frankly better than I expected from a topline perspective.
And I'm wondering if you if you view that as a sustainable where there are some factors related to seasonality or you know the way. Your backlog is set for delivery that we need to be aware of here in the near term. Thanks.
No I think theres many pieces of the does the margin improvement that we continue to realize that we'll see move forward into Q4.
Certainly these are all you know we're still in a very fluid situation relative to impact of Covidien and.
That obviously has an impact on our customers and their willingness to take orders in time. So it's hard for us to give you a lot of confirmation, but I can tell you that.
You know again the margin improvement that we've actually seen in Q3 is we would expect that that would be.
View, you don't we'd realize that same type of improvement in Q4.
And the topline.
How do you think about the top line Yeah. No I think you know we're entering into Q4, you know, obviously with a with a pretty decent back.
Backlog and we we feel as if though.
That should help us in Q4.
But again you know we don't have control over customers regards to permitting then taking of orders. So I'd hate to give you too much confidence in regards to what thats going to look like even for the rest of this year, albeit just a couple of months now so.
But on the margin side, we're more comfortable to comment that.
We should be able to see some stickiness in regards to our performance there.
Okay. Thank you.
Yes, Thanks, Mike.
The next question comes from the line of Stanley Elliott with Stifel. Please proceed with your question.
Hey, good morning, everyone. Thank you all for taking my question.
[laughter] call earlier in the call you mentioned stronger margins in the asphalt plants curious is that pricing is it well how's pricing in the industry doing.
Is that more parts sales you mentioned that I'm, just curious to get a little more color around what's happening with the plants business.
Yes, so I would say generally in the marketplace family. Thanks for the question is that the pricing is it in pretty good shape. Obviously, you know, we do see a little bit of pressure, but we haven't seen anything that's erratic and so I would say we continue to look at our discounting and manage that pretty effectively. So I think ultimately you know even with.
You know the market as it is we're trying to get as much prices weekend on the products that we're selling.
Yes, there is a little bit of impact on parts, we saw the parts business in general.
Tick up to about 32% of our sales in.
In the third quarter, which is a little bit of an increase from the us.
Prior to control sequential quarter. So I think generally and I also believe that we are getting a little bit Opex, you know with a procurement activities, we have going on in the the land that were driving through our facilities, that's contributing to our cost and lowering that and helping us as well.
Great and.
Looking back over the periods when we've had either an infrastructure bill or new highway Bill.
When do you start to realize that in your order book I'm just curious on the timing and then I guess the second part to that would be with kind of a new procurement system in place and a lot of changes on the the inventories sourcing side.
You kind of speak to the confidence that that this new structure will be able to meet that elevated demand when it hopefully comps.
Yes. So you know we're pleased that the if the government through the reauthorization give folks the fast act has given us another argument our market. Another 12 months of visibility I think that helps.
How did this opportunity recently to spend a lot of time with different refresh what congressional offices, both Republicans and Democrats to understand where things stand and I was pleased with the fact that on both sides, where there's a how senator Republican or Democrat sit there all they all see the Oh.
Longer term infrastructure Bill is a high priority pass this election.
So thats good news. So ultimately you know I think that as far as when we would realize you impact from a longer term infrastructure Bill I think we enter into this we're in a timeframe as you did you talk to our customers that they have a backlog that takes some into 2021 and so their relative.
Really in good shape there.
That helps but a reauthorization or a new infrastructure Bill is one that we would typically take maybe a year to start to see some of those projects actually maybe a little bit longer.
The hit the market, but I think ultimately we are going into it with a pretty good position so hopefully that.
It gives our customers some confidence and their customers' confidence to go ahead and pull the trigger on projects.
Great and then and then lastly for us.
For the for the product classes that hold inventory.
At the dealership level, you how was that.
On a relative basis.
And maybe any commentary about some of the customers that are renting equipment. If they are opting for the ownership opportunity would just love to get a flavor for whats happening on the ground.
Yes, I know I've been very pleased with our teams.
Tenacity on inventory of finished goods and working with our distribution partners continues to drive that down to a very low level.
I think today we're at.
A level that is you know puts us right on top of the market and.
Back to you alluded to in her piece is that there has been a little bit of a uptick in flow of orders and that's because of that lower inventory that we've had over the last many months Stanley relative to our dealers. So they are very low on inventory and as they look forward we've seen some order flows.
You know increase you know as we entered as we exited 2000, a day as we exited Q3 and again, that's because they're very they're very tight with the market relative to their inventories relative to the the leasing that continues to be a big part of our customers operation model and obviously.
Obviously through this timeframe as we actually ended up as we exited out to 2019 and entered into 2020, we have seen some of those leases continue on longer timeframe than what we would've expected, which obviously means theyre not can be converted over to retail orders is as quickly as we would have maybe thought they would and I think thats a little bit.
Due to the uncertainty relative to coated and what's going on in the marketplace, but that is that's something we stay very close to and and make sure that we understand how thats trending so when we start to build our SDLP process. We can make sure that we have those volumes.
Predicted as closely as possible to ensure that your point that we have the inventories that we have the workforce that we have the capacity and ability to to react to them quickly. So I feel good from a business perspective that our team at Adtech is very much on top of what's going on in the marketplace and that allows US then to flow those demand.
In whatever direction through our systems in order to make sure that we're ready to take care of our customers.
Perfect very Becky Steve. Thank you guys for the time.
Thanks, David.
Thank you as a reminder, you and you May press Star one to ask a question at this time.
Thank you.
At this time I will turn the call back to Steve Anderson for closing remarks.
Hi, Thank you Rob again, we appreciate your participation on this conference call and thank you for your interest in Astec.
As today's news release indicates today's conference call has been recorded a replay of this conference call will be available through November 18, 2020, and an archived webcast will be available for 90 days.
Transcript will be available under the Investor Relations section of the Astec industries website within the next seven days all of that information is contained in the news release that was sent out earlier today. This concludes our call. So thank you all and happy to connect later on with any additional questions. Thank you.
Thank you ladies and gentlemen. This concludes today's teleconference. Thank you for your participation you may now disconnect. Your lines at this time and have a wonderful day.