Q3 2021 AZZ Inc Earnings Call
Day and welcome to the easy the Inc. Third quarter of fiscal year 2021 financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After todays presentation, there will be an opportunity to ask questions. Please note. This event is being recorded and what not like to turn the conference.
Over to Joe Dorame. Please go ahead Sir.
Thank you Chuck good morning, and thank you for joining us today to review the financial results and Ace Easy Inc. For the third quarter of fiscal year 2021, and didn't November Thirtyth 2020, joining the call today are Tom Ferguson, Chief Executive Officer, Philip <unk> Chief financial.
<unk> and David and Arc Senior Vice President marketing Communications and I are after the conclusion of today's prepared remarks, we'll open the call for a question and answer session. Please note. There was a slide presentation for today's call, which can be found on easy These investor relations page under financial information at Www Dot easy Dot com.
Before we begin with prepared remarks, I'd like to remind everyone. Certain statements made by the management team of easy easy. During this conference call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act was 1995, except for the statements of historical fact this conference call may contain forward looking statements that involve risks and uncertainties some of which.
A detailed from time to time and documents filed by easy with the Securities and Exchange Commission, including the and report on form 10-K for the fiscal year ended February 29 2020.
Those risks and uncertainties include but are not limited to changes in customer demand and response for products and services offered by the company, including demand by the power generation markets electrical transmission and distribution markets, the industrial markets and the metal coating markets prices and raw material costs, including thinking natural gas, which are used in the hot dip.
Galvanizing process changes and the political stability and economic conditions and the various markets and easy serves foreign and domestic customer requested delays of shipments acquisition opportunities currency exchange rates adequate financing and availability of experienced management and employees to implement the company's growth strategy.
In addition, 80 these customers and its operations could be potentially adversely impacted by the ongoing Cove at 19 pandemic.
The company can give no assurance and such forward looking statements will prove to be correct. These statements are based on information as of the date hereof and easy assumes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise with that out of the way, let me turn the call over to Tom Ferguson, Chief Executive Officer of.
A's easy Tom.
Thanks, Joe Happy New year, and everyone and welcome to our third quarter fiscal year 2021 earnings call.
Thank you for joining us this morning, well be continued to be impacted by COVID-19 or markets are stabilizing and our businesses have adapted to the new normal way of operating which encompasses a variety of challenges that we have had to overcome.
Well, we have had an uptick in club and cases all of our plants have remained opened with normal production. The collective efforts of our folks generated consolidated sales of 227 million for the third quarter split almost equally between our metal coatings and infrastructure solutions segments.
We had some sequential improvement and operating performance and we have returned over 44 million of capital to shareholders and the form of cash dividends and share repurchases through the third quarter of this year.
Also we have made good progress on our board led strategic review that we announced earlier.
While sales were down 22% from Q3 of last year, our realignment activities and operational performance generated net income of 19.7 million.
Down about 10% from the same period of the prior year.
This resulted in EPS of 76 cents per diluted share were 80 cents on an adjusted basis. Our mother coatings business continues to execute strongly while navigating the economic uncertainty resulting from coated.
The galvanized and sales were down 8.8% from the same quarter last year, while surface technologies was down more due to the nature of their customer base being more impacted by Kobin.
Within our infrastructure solutions segment third quarter sales results improved sequentially, even with a muted for refining turnaround season.
Segment results were below the same quarter of the prior year due to the protracted weak demand for refined oil products as well as lower international sales primarily from China.
As we previously communicated earlier this year due to shifting and industry and customer dynamics and the protracted impact to the Cove and 19 pandemic.
We began to take aggressive steps to accelerate the strategic restructure of our core portfolio of businesses with the goal of becoming predominantly a coatings business.
Our actions during the quarter included recording a loss on the sale of SMS and 1.9 million.
And initiating a comprehensive board led review of our businesses with the assistance of leading independent financial legal and tax advisors as I mentioned.
A review and the infrastructure solutions businesses and associated assets and the exploration of other capital allocation opportunities and maximize shareholder value is ongoing and I am pleased with the progress. The team has made during the quarter finally, given the share repurchases currently and attractive use of our capital we repurchased over 652000 shares in the quarter.
Which brings our total for the year to over 850000 shares.
While our metal coating segment had lower sales and the third quarter of the prior year. They were able to generate higher operating income and improved operating margins to 24.8% surface technology sales were still way off at some plants, primarily due to how badly cobot impacted demand for several or several of their largest customers.
However, during the quarter surface technologies began to reopen powder coating lines and to Texas plants that had previously been idled earlier in the year.
I am, particularly pleased with how the metal coatings team continues to drive value through outstanding customer service and operational performance, while maintaining market level pricing as they benefited from lower zinc cost during the quarter.
We remain committed to our strategic growth plan for this segment as evidenced by last weeks announcement regarding the acquisition of Acme Galvanizing and Milwaukee, Wisconsin.
No Cogut has slowed our normal pace of acquisitions I'm grateful that the team was able to close this acquisition right after the holidays.
And want to take a moment to welcome the ACMI galvanizing employees and customers to A's easy.
As we previously indicated.
<unk>.
And our second quarter earnings call, the third quarter turned out sequentially stronger, but turnaround activity remain constrained by koby travel restrictions and continued low to me and for refinery products.
Our infrastructure solutions segments third quarter fiscal 2021 sales decreased by 31.5% to 111 million.
This resulted in operating income of 8.7 million as compared to 17.4 million in Q3, a year ago.
As I mentioned previously the decline in sales was the result of muted refinery turnaround activity in the quarter, particularly in the U.S.
As well as lower China high voltage bus shipments and decreased demand for some of our oil patch related products and services.
WK size domestic and foreign facilities remained open and working and crews deployed on on several smaller projects.
All of the electrical platforms operations also remained open throughout the quarter as they effectively manage the uptick in Kobe cases.
Due to the prolonged uncertainty associated with the cobot pandemic on many of our end markets, we will not provide and updates to our previously suspended fiscal 2021 earnings and sales guidance range.
However, we believe our fourth quarter will be seasonally lower than the third quarter, but we should generate improved earnings versus the fourth quarter adjusted earnings of last year.
Our low debt level combined with our consistent ability to generate strong cash flow provides us with the ability to effectively manage our debt and liquidity throughout the remainder of fiscal year 2021 and beyond.
We expect to establish guidance for a normal cadence for the fiscal 2022, as we wrap up our annual budgeting process and review it at our upcoming board meetings.
Our metal coatings businesses operating and fairly normal level. Despite some continued restrictions and disruptions and a few of the cities and states we operating.
We are confident though that our business remains vital to improving and sustaining infrastructure. So we will use the remainder of our fiscal year to position our core businesses to emerge stronger and better equipped to provide sustainable profitability growth long into the future.
With that said I'll turn it over to Philip Thanks.
Thanks, Tom.
Third quarter of fiscal year 2021, we reported sales as Tom and noted of $226.6 million, a 64, and a half million dollar decrease or 22.2% lower and the third quarter of the prior year.
Sales were down primarily as a result of lower sales and the company's infrastructure industrial platform as a result, and the pandemic and lost aggregate sales from divested entities over the past year.
Net income for the third quarter fiscal 21 was $19.7 million and decrease of $2.3 million or 10.6% below the prior year third quarter.
Diluted EPS of 76 cents per share declined nine and half per cent compared to the 84 cents.
Per share in the prior year third quarter. Despite the lower sales third quarter fiscal 2021 gross margin improved 100 basis points to 21 point, 24.1% on a year over year basis and was driven by continued strong margin performance within the metal coating segment.
Operating margins of 12.3 percentage of sales increased 80 basis points compared to 11 half percentage of sales and the prior year.
Operating income for the third quarter fiscal 2021 decreased 16.6%.
The 27.9 million from $33.4 million and the prior year third quarter.
Third quarter EBITDA of 39.6 million decreased 15.4 per cent compared to 46.8 million and EBITDA and last years third quarter.
As for the year to date results.
The third quarter of fiscal 21, we reported year to date sales and 643.3 million.
21.2% below the 816, and a half million and the sales and the same period last year.
Year to date net income for the third quarter was $23.5 million, a decrease of $35.4 million or 60.2% and the same period last year.
Year to date and net income as adjusted for the restructuring and impairment charges, primarily incurred early and there was 39 million.
Which was 19.9 million or 33.8% lower than the comparable prior year results.
Year to date reported diluted EPS decline.
Declined 59.8% to 90 cents, a share as compared to $2 and 24% $2.24 per share for the same period last year, primarily driven by restructuring and impairment charges as well as softer markets and travel restrictions, resulting from the pandemic, mostly and our infrastructure solutions segment.
On an adjusted basis.
Year to date 2021 diluted EPS was $1.49 per share a reduction and 33 and a half percentage from the prior year.
Our fiscal year 2021 year to date gross margin of 22.2% declined 60 basis points from the gross margin of 22.8% from the prior year.
Year to date reported operating profit and 42.8 million.
It was 43.8 million or 50.5% lower than the 86.6 million reported for the same period last year.
Year to date reported operating margin of 6.7 per cent decrease 390 basis points compared to 10.6% last year.
On a year to date basis, excluding the impact of the 20.3 million and restructuring and impairment charges operating margins were 9.8% or 84 cents 80 basis points below prior year.
I will now turn to discussion regarding our liquidity and capital allocation and.
On a year to date basis, our net cash provided by operating activities and 59.4 million declined $12.7 million or 17.6% from the comparable period and the prior year, primarily the impact of lower year to date net income.
During the third quarter of fiscal 2021, as Tom and noted we repurchased 652000 shares of our common stock and an average price of $37.66.
On a year to date basis, we have repurchased 852, and a half million thousand shares.
At an average price of $36.31 per share.
Investments and capital equipment to support our business were 8.6 million for the third quarter and 27.9 million on a year to date basis, which are in line with our expectations and spending roughly 35 million for the year.
And the end of our third quarter 21 are assisting debt of a 182 million is down 20.9 million and the ended the year.
As we continue to effectively manage our balance sheet.
I will now turn it back to Tom for his final comments, Tom. Thank you Phil I'll close by sharing with you. Some key indicators that we continue to monitor for the metal coating segment and fabrication activity will remain solid during the balance of our fourth quarter and we were off to a reasonably good start and December within our galvanizing business. We are closely tracking steel fabrication.
And and construction activity.
I think cost and our kettles are relatively stable, but we anticipate increases and zinc costs and.
Fiscal 2022 as zinc prices on the L. and me have been rising for a while now.
Yeah, and galvanized and team is being quickly integrated into our existing operating network, bringing our total hot dip galvanizing locations to a market leading 40 sites in North America. In spite of recently closing to Gulf Coast locations.
For surface technologies, we're primarily focused on growing sales with both existing and new customers and driving operational process improvements.
Within the industrial platform and the infrastructure solutions segment, we continue to carefully monitor the cobot situation and the states with large refining capacities.
Currently we still are experiencing travel restrictions in some countries.
For the electrical platform of the infrastructure solutions segment, we are carefully tracking proposal activity and experienced solid bookings in December.
We will continue to focus on growing the backlog for many of our business units. So that we enter fiscal year 2022 in good shape. Finally for corporate we have strong cash management processes and a further focused our oversight on cash flow indicators and customer credit currently we have not experienced any slowdown and customer payments.
Most cobot crisis, we remain committed to our growth strategy around metal coatings, and achieving 21% to 23% operating margins, including an increased contribution from surface technologies. We believe galvanizing would tend to run to the high end if not above the 23% while surface technologies is going to have to rebuild his margin.
Profile as customer demand grows for infrastructure solutions, we will continue to focus on improving operating margins, while we complete the comprehensive strategic evaluation of this segment.
We feel quite confident in spite of cobot and other disruptions about the actions we've already taken and the restructuring activities that are now underway.
We intend to focus on completing the board led review of our businesses and finished this fiscal year well positioned to enter fiscal 2022 with momentum finally.
Finally, we will remain active in the area of M&A, primarily and metal coatings, and we'll aggressively seek activities that support our strategic growth plan while.
While pandemic related deal travel was still somewhat restricted during the third quarter. We are seeing improved travel conditions and have an active portfolio of opportunities that we will continue to pursue.
And with that we'll open it up for questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we'll pause momentarily to assemble our roster.
And our first question will come from John Franzreb with Sidoti and company. Please go ahead.
Hi, good morning, Phil.
Hi, John.
And just what I showed him.
Couple of quick questions first.
First on the metal coating, saying.
The proving the margin.
On a year over year, how much the tide and the operating margin how much does that reflect the divestiture of some of the underperforming businesses versus the improvement in zinc price.
You know that's a that's a that's a good question [laughter].
It's still predominantly driven by operational improvements drive and zinc zinc.
Price versus cost.
The the divestiture of Galvabar had some effect.
But but they're really not that much and then the facilities, we closed earlier and the year, we picked up most of that business in other locations.
Okay. So really it was more of a change and the business profile than the lower prices, Inc, and and I.
Getting that correct no no the lower the lower cost of zinc and and our ability to.
The sell on value did did play a part and.
But keep in our operations open and and and operating through co bid I think was sent that we point to a lot.
Okay.
I spoke about last conference call that you anticipate and we turnaround season. This fall, but that the quarter bookings were promising for the spring is that still the case or is there and the change either to the positive and negative.
On the and construction side of the business.
Yes fall came in about what we thought and you know its a.
The W. ASI business was was off significantly versus Q3 last year for that reason.
We were able to travel.
To some locations, but it's so it's mostly driven by.
A weak oil.
Week refined oil products demand.
Which doesn't drive turnaround.
As far as the spring, we Steve we still feel good about the spring.
Don't.
When when it say it stack and up to be.
A boomer of dub the spring turnaround season.
But we are quoting.
Well and and getting some orders on the books so.
So we so we feel good about it but but definitely not.
Seems like things are going to take a little bit longer.
For refineries to start doing turnarounds again, as as gasoline demand and jet fuel demand continues to grow.
So that's why we feel pretty good about the spring.
Yes, I'd say a lot of this is looking like its going to spread through the year.
HM Okay, and one last question I'll get back into queue with every professional fees that you incurred during the quarter, alright, dissipate and and the fourth quarter you could parcel out force.
Yeah, we are incurring some fees related to our comprehensive review that we've disclosed.
I wouldn't say, they're overly significant at this point in time.
Okay I'll.
I'll get back in queue. Thanks, guys.
Hi, John.
Our next question will come from Noelle Dilts with Stifel. Please go ahead.
Pardon me it seemed quite well they'll test it seems that he has left the question queue. Our next question will come from Jon Braatz with Kansas City.
Capital. Please go ahead.
Good morning, everyone.
[noise] Thomas our question the as you do your strategic review and you think about being more of a metal coatings company.
We currently have galvanizing you have surface technology is what might else there be that would fit into that.
That strategy.
You know I think it's there's a there's a lot of different types of coatings and lots of different types of plating, anodizing and things like that so.
So when we when we talk about.
Coatings versus just metal coatings. It opens it up quite a bit because we're already as we found with the businesses. We have acquired and last couple of years.
We're we're coty and a lot more than just metal pieces. So.
So that that makes it a really really wide market. The the issue for US is finding things that have some scale that can be differentiated that require more than setting up a paint shop and a garage. So.
So I think while it's a wide open.
Set of opportunities for us.
It's something that we do have type parameters on in terms of what we're looking for because of our commitments on the margin profile and.
And and our ability to differentiate.
And so you know I think that's a and there continues to be galvanizing opportunities and one of the things. We're completing another spin plant down in Houston and that I think goes online.
Due to all the weather delays and coke and delays, it's going online at the end of this month I believe.
And so we look at that as other opportunities for us to grow organically. So.
And they are still you know obviously with the acquisition of Acme, but we've been working on that deal for a while and it had been delayed because of coated and.
And so as we start to get out again, and we're worried contact on with some of the traditional galvanized and deals yep. Okay. So we feel pretty good about things. Okay is there a day when you talk about parameters.
Anything you brought up and can you tell us in terms of financial parameters size of what you might want to what you might be looking at and terms of size.
You know, we we pretty much have to look at things north of $10 million and revenue obviously tend to.
Up to over 100 million is so.
So you know we we prefer 15 to 25 million is probably you know our preferred target.
But we're more focused on does it have.
And operating leadership team does it have because we're you know unlike galvanizing, we're still build and that talent bench.
So we don't have people, we can just plug and play the way, we do and galvanizing.
So so it's a so we are a little more careful about what kind of leadership in place.
Usually we prefer the owners go away but.
I'd say.
Size and it really I'll say, what we're not looking for and there is a lot of this out there is the five and fifteens as I call them, so, 5% EBIT, 50% EBITDA, because if they're multi site deals they tend to have been acquisitive and so they have a lot of D.A., but not a lot to not allow operating income.
So.
Good day.
This this narrows down the slate of opportunities and.
Yet, it's still a pretty good pipeline and if that we havent okay.
One final question just after December <unk>, my conversation with a a fertilizer company or.
Domestically and we talked about a lot of things, but they talked about their turnaround season and.
It's <unk>, it's going to be sort of abbreviate it for them and just because there's travel restrictions and so on and so forth and I guess as you look at that spring turnaround season.
And the activity your quote and you're bidding on and so on.
And some of that still potentially at risk of being postponed or delayed if you want to call. It because of this increase and covert cases or are they sort of you know at this point walked in and it's going to happen.
I think that Ken as I answered a little bit earlier, it's it that is what gives us some pause.
And thinking about it being as strong as we'd we'd probably were thinking.
Last on the last earnings call.
I do think some of this has to go forward and and of course, we prefer when we get engineering orders in and we know that starts to give US a line of sight to how big the project is in and and some surety that it is going forward.
Very seldom once we have engineering and orders do they do they not go forward.
So yeah, there is still some concern.
We are seeing some activity.
In January and February that probably normally we would see either have seen in the fall or we would see in the spring. So it does seem that.
The petrochem sector is spreading things out a little bit.
Perhaps because of low demand. So so they are able to spread thing. So that's why I say some of this could it could be a longer season.
Without the the big Spike in the spring, but actually that's good for us because we do have limitations on the number of crews. We we have to deploy cash alright. Thank you very much I appreciate it.
Our next question will come from Noelle Dilts with Stifel. Please go ahead.
Hi, good morning.
And I'm.
I'm not sure what went on but for now.
[laughter] I didn't go anywhere and so I just wanted to start first on the demand side for and infrastructure solution and a little bit more on the electrical side and that does not sell Sars and that's if that could you just help me understand what's driving the stronger demand for switch gear and then you were originally anticipating and.
The degree to which you think that might be sustainable over the next few quarters.
Yeah, I think the transmission distribution spend has been good and some of the solar power Gen activity has been good as well. So you know, it's just the timing and some of these projects where they're getting to that stage.
Where they need to switch gear. We also with the acquisition of Oshkosh couple of years ago, We picked up more revenue industrial switch gear line, and and I call it industrial or even light rail.
That so it's broad and our opportunities for switch gear. So we're not just dependent on the big utility grade stuff. So.
Although thats, where we have had good activity recently.
So part of it's just our customer base, and where we're focused and and.
Im not sure that it's indicative of a general.
Uptick in.
In the sector, it's more around our customer base and and closures is.
It is somewhat similar I'd say the big.
Some of our big OEM activity has been off on and closure side, but our industrial and.
And some of the smaller stuff has been solid so it's just a really mixed bag out there I.
And and so part of this and just where we're selling and what we're picking up and and where our customers are active versus where they are not so.
Okay versus the bus side, which you know.
For the most part the high voltage is focused on a lot of international activity Theres, some domestic and and we've gotten some orders, but right now. It's you know the last quarter was quiet and medium voltage we have.
You know, it's a fairly narrow.
Offering that we have so.
So we're we're.
We're just slower than we were a couple of years ago.
Okay got it and then sticking with on infrastructure solutions, but shifting to profitability.
And you know profitability and the quarter really exceeded my expectation.
And particularly given that you know the.
The turnaround work has been that the industrial side, the turnaround work at sub and flow.
Could you speak to kind of how you're thinking about margin start moving forward. If this if he said you know the turnaround activity remains somewhat muted and as you look forward I mean, I know the cost structure for that business and pretty flexible. So do you have it to a point where were now where it's not you know as big of a drag and if you were kind of looking at over the past few quarters.
Yeah, you you touched on a good point, there and Noelle, we had taken pretty significant costs.
Actions early well back in the spring when we saw that this spring and been wiped out. So we took out some of that paid caught back office, but.
But the FG and H.
And in infrastructure solutions.
And adjusted capacity and in some of the operations. So so that as we came into the third quarter with just.
Moderate activity or even muted activity.
We were able to get to pretty good margins on the work that we did have because of our lower cost structure.
And as you know, though that also then limits us on the upside when when we have a big opportunities and.
As we had originally we're anticipating in the spring so we do hope that it.
It stretches out I think the margin profile for infrastructure solutions, we continue to look at getting to that 10%, 12% operating.
Operating margin of 15% EBIT da.
And we think that's doable with with the structure, we have and with the actions were taken on the international side to try to.
[noise] improve our ability to serve.
The international markets with a with a lower cost structure.
Okay, Great and then just shifting over to metal coating and.
[laughter] comments that you have and again as I am.
Ask every quarter and the markets that were particularly strong or those that were particularly weak and and you know how maybe any changes in the markets are impacting how you're thinking about the growth profile for that business over the next 12 months.
You know Weve [laughter], we do love our metal coating side so they.
The the galvanizing team did outstandingly well.
Keeping their their facilities open and and and and and productive inefficient.
So their margins were north of 25%, even even probably close we're in the 26% range for the quarter.
And part of that as I mentioned earlier is driven by though the the price to zinc cost ratio, but also.
We give credit to some of the things we've done on the technology side with.
These are the galvanizing system, dgs, it's allowing us to operate more efficiently and more productively and flex our plant capacity.
And it and adjust and and then react to the.
The data we are getting from it so.
So we feel good about that on and on an ongoing basis.
Our markets.
As as we kind of finish this year, we have a good line of sight for this quarter and and feel good about how this year is going to turn out as we get into next year were.
Our customers are feeling okay, right now I think.
They're waiting to see is there going to be corporate tax reform is it going to be an infrastructure bill which would have much impact.
On on them next year, but but it kind of changes there.
The attitude.
So I'd.
I'd say, we feel good about going forward. There is some competition coming into the market a few new kettles next year.
That that'll probably come online at the same time, we've we've taken out some of our plants as have some other folks so.
So we feel pretty good about the supply demand balance and in galvanizing.
And feel good about our team's ability to respond to it so.
So yeah we.
I continue to believe sustaining.
North of 23, but by COO of a metal coating doesn't like and what I say stay it up around 25%, but but they've demonstrated.
And straight and they are pretty good and doing that.
Okay.
Perfect. Thank you very much.
Our next question will come from Deforest Hinman with Walthausen and company. Please go ahead.
Hi, Thanks for taking the questions just building on that last comment I can do can you extend and in the pricing and me on the galvanizing side you made reference to.
Zinc pricing going up.
Are we going to be able to move pricing and directionally higher and.
And 21.
And I think there's a.
Generally thats you know as as zinc so.
Since zinc cost is about 25% of our cost of goods sold on average.
It will tend to move the market price up I.
As I like to tell people. It's we've got 40 galvanizing plants, we fight 40 different battles every day every week.
But it would be our intent to as our costs go up to migrate our prices. We've we did a good job I think of selling value sustaining.
Our price is some of that was because our facilities were open and.
And and we were able to keep them fully staffed through through co vinod, which which continues but.
So yeah that would be the intent continue to migrate price up as our costs go up and we would hope that the market would respond to that.
Okay, that's helpful and respond.
Okay very helpful.
Just clarity and the 10-Q, there was a reference to the acne transaction and it says net proceeds were 4.2 million and is that a.
Bargain purchase gain or is that just the way it's phrased it was 4.2 million cash consideration.
That's the cash consideration.
Okay, and then and.
That any type of EBITDA color, there or is it kind of more asset type purchase price number there that we're seeing.
That's more the asset purchase price and as Thomas mentioned in the past year, we get in pretty quickly.
And we're able to integrate those facilities.
You know within the first three months. So we've already had a team up there on day, one integrating them into our Oracle business system, and and moving them into the easy way of doing things.
Okay, and then related to the deal that we just announced there's there's continued commentary that we're working on deals.
Can you give us any color in terms of.
Expectations for closing within the next six to 12 months and then essentially.
The outlay that any type of these deals could entail.
Oh Boy just has to do it because.
Yeah, we we've been working on some deals we thought would be closed and.
So yeah, I I, just hesitate to say, we're going to get anything done and any any specific timeframe we.
We are traveling and where we mostly do face to face deals.
The ACMI team, we've been working with for quite a while so so there was a relation long relationship there.
We have long relationships and a couple of other opportunities.
And.
And so I would hope that during the first part of the year, we can can move those forward.
But as you know I think theres theres, so many variables right now but just.
Just look for us to continue to add we normally get a couple of deals every done every year. This year we.
You know and divestitures and.
And the early part of the year and then only got one acquisition.
So I would think for this upcoming fiscal year, we'll get back into our normal get a couple three deals done and.
On the acquisition side, but the call and Im in the first half versus the second second I I really can't.
Okay. That's helpful and last question can you just give us an update and.
The outlook for utilizing the share repurchase authorization, a you know pretty active and the third quarter I think and the high Thirtys share price execution, you know the markets responded well to and strategic review and and the markets and moving up generally.
The current share price.
Camp and our expectations of utilizing the share repurchase authorization and Oh, we're starting to think about capital deployment as it relates to you know buyer on stock or doing acquisitions.
That's a really good question I think this is Philip and one of things. We're doing is obviously going to be this comprehensive review and as part of that comprehensive review, we're looking at the valuation of easy and its pieces and and where do we continue to buy but we have board authorized $100 million to spend and depending on as you were just asking.
Related to M&A active.
Activity will evaluate you know how we deploy capital across the board yeah.
Yeah, and I want to add we.
We had tenbfive one and place.
For the quarter.
And when and things we had not anticipated was that the rapid run up in our share price and so we we we did outstrip it.
And in the latter part of the quarter. So.
Thats the kind of thing that.
Maybe dampened our activity right at the end of the quarter, but.
Those are the things we will look at as Philip said, we've got a board meeting coming up we've got.
Okay and update on the evaluation activities and and one of that was looking at valuations. So.
So we you know we're we're just in the next couple of weeks, we'll we'll have a better idea.
Direct and we're going to go.
Okay. Thank you for the color I appreciate your time.
Thank you.
Our next question will come from John Franzreb with Sidoti and company. Please go ahead.
Yes, Thomas sitting and paired remarks, and why yours and.
Spend guidance that.
And you're going to be.
Visited once you go through your budgetary process.
Does that mean, you'll be issuing guidance sometime this month like and having to pass or or not.
Yeah, we would hope to the only thing that gives me any pause is we do have this this ongoing.
Strategic evaluation activity and I just want to make sure. We don't you know, we don't put guidance out for 22.
And then two weeks later announced a strategic move so.
So that would be my only.
Cautionary note other than that it would be our intent to get back into cadence.
Got it and just on the strategic viewing and and.
Essential sales infrastructure business.
What's the current likelihood of being sold as a whole unit or being sold and peaceful.
Were would and we're not at that point in India.
And the evaluation yet from meta to handicap that.
To be honest.
Okay and give it a shot okay. Thank you.
[laughter].
Right.
This concludes our question and answer session I would like to turn the conference back over to Tom Ferguson for any closing remarks. Please go ahead Sir.
Oh, we just thank you all for for being on the call and as always we David Arc is a available to take calls.
Calls from folks if you want to have further discussions.
We look forward to finish and out this year being able to announce a the direction and from our strategic evaluation activities.
And and then we'll be talking to you at the end of this fiscal year and hopefully and positive note and so we look forward to that thank you very much.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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