Q3 2021 Carpenter Technology Corp Earnings Call
Okay.
Yes.
On the details for Boston.
The next week.
[music].
Got it.
[music] income.
Yeah.
Good morning, and welcome to the Carpenter Technology Corporation fourth quarter 2021 earnings Conference call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by T Rowe of.
After todays presentation, there would be an opportunity to ask questions to ask the question you May Press Star then one on your telephone keypad.
To withdraw your question. Please press Star then two.
Please note that the C band has been recorded.
I'd now like to turn the conference over to Brian <unk>. Please go ahead.
Thank you operator, good morning, everyone and welcome to the Carpenter Technology earnings Conference call for the fiscal 2021 third quarter ended March 31 2021.
Call is also being broadcast over the Internet along with presentation slides. Please note for those of you listening by phone you may experience a time delay in slide movement.
The acres on the call today are Tony James President and Chief Executive Officer.
Senior Vice President and Chief Financial Officer.
Statements made by management. During this earnings presentation that are forward looking statements are based on current expectations.
Risk factors could cause actual results to differ materially from these forward looking statements can be found in carpenter technology's. Most recent SEC filings, including the company's report on form 10-K for the year ended June 30 of 2020 form 10-Q for the quarters ended September 32020, and December 31 2020.
On the exhibits attached to those filings.
Please also note that in the following discussion unless otherwise noted when management discuss the sales or revenue that reference excludes surcharge whenever.
The operating margins that is based on operating income and sales excluding surcharge I will now turn the call over to Tony.
Thank you, Brian and good morning to everyone on the call.
Let's begin on slide four and a review of our safety performance.
<unk> year to date total case incident rate the TC, Iowa 0.6, you.
We have now demonstrated three consecutive quarters of sub 1.0, PCI on performance as an organization, which is exceptional safety performance.
We do not take these accomplishments for Greg.
The continued to enhance the fundamentals of the program in areas such as hand safety human performance leadership development.
The mix is.
For the engagement activities and at home safety programs.
Look forward to achieving our next safety performance milestone actually pursue safety excellence on the path to zero.
Now, let's turn to slide five and review of the third quarter.
The third quarter results were largely in line with our expectations as near term volume headwinds related to COVID-19 continued to pressure on financial performance.
Most of our Seo and Pep segment.
<unk> delivered results that were consistent with the guidance, we provided on the second quarter earnings call.
We have maintained the focus on the key strategic priorities during this challenging period.
First ensure the safety of our employees.
Drive cash flow generation and strengthened our liquidity profile.
Over the last four quarters, we have generated $189 million and free cash flow.
And ended the third quarter with total liquidity of $539 million, including 244 million of cash and no near term financial obligations.
And third focus on the long term relationships with our customers.
During the quarter, we continued to expand our relationships across the customer base and then cover additional areas of value creation.
The evidence we completed several contract extensions, primarily medical transportation and aerospace and defense end use markets.
In the aerospace market customers fully understand.
Patsy with limited prior to the pandemic.
Fly of aerospace materials will be constrained again, the build rates returning to normalized levels.
No.
For the technology is the only company in our space that has invested in the capacity, namely the Athens facility.
Qualification efforts have continued through the pandemic as we received a meaningful provisional approval during the quarter.
Lastly, the investment made in on Hot strip mill on our reading campus is currently in its final commissioning stages.
This advanced mill is a significant addition to our soft magnetics solutions and capabilities portfolio and positions us to benefit from the growing trend of electrification.
Now, let's move to slide six and the end use market update.
Our customers and markets had been heavily impacted by COVID-19, particularly aerospace and defense our largest market.
We have been successful on mitigating a portion of the near term impact of the aerospace downturn.
Capitalizing on growing demand for our solutions and transportation and industrial and consumer end use markets, namely our semi con business.
Recently, all of our end use markets have experienced positive inflections and have moved past the pandemic declined trajectories.
All of our end use markets other than demand recovery, albeit a different range.
We believe the worst is behind us and we expect to see improving conditions over the coming quarters.
Let's get into some more detail starting with the aerospace and defense end use market, where sales were down both year over year and sequentially.
On the third quarter customer inventories continued to decrease and we saw some initial replenishment activity.
As a reminder.
Recent second quarter, we talked about a variety of one time customer contract related items, which represented the positives when.
When you remove the impact of those items aerospace results would be relatively flat sequentially.
While visibility remains limited overall sentiment points to incremental improvement through the balance of calendar year 2021, and the accelerated activity in calendar year 2022 and beyond.
In addition, future industry capacity in the lead time continues to be a focused or the conversations with customers as most of the call the situation with supply chain of again prior to COVID-19, where lead times were significantly extended.
Activity in the defense sub market remains solid and we continue to see increased demand on select programs.
On the medical end use market sales were up 7% sequentially.
The procedure volumes increased compared to the second quarter ex patient summit and hospital capacity improved.
The recovery of elective surgery volume is expected to continue into the second half of calendar year 2021, ex vaccination levels rise to support increased confidence.
Based on current conditions, we expect the activity levels on the medical end use market to show further improvement for the fourth quarter as our customers look to support an increase of elective surgeries.
As many of you recall the medical end use market was one of the fastest growing markets prior to the pandemic.
Today, we remain well positioned to continue supporting the medical end use market given our expanded OEM relationships, leading advanced materials portfolio and ability to develop new materials solutions that address complex and unmet market needs.
In the transportation end use market sales were up both sequentially and year over year on.
Sequential basis sales increased across all of our Submarkets.
Demand in the light vehicle market remains solid driven by North America, and China all of the heavy duty truck market has largely recovered and is expected to grow through calendar year 2022.
Overall, we are winning share in both the light vehicle and heavy duty truck submarkets due to the value of our high Tech high resistance turbocharger and valve exhaust solutions.
Now moving to the energy end use market.
Conditions in the oil and gas sub market remains challenged and activity levels remain low in the U S. While the international markets have shown some improvement.
In mind the prior year third quarter results included our Omega West business that was divested during the first quarter of this fiscal year.
In the power generation sub market, we continue to work with customers as the current maintenance upgrade cycle continues.
Lastly for the industrial and consumer end use market sales were down year over year and sequentially.
The slight sequential decline was a function of order flow between the last two quarters as we continue to experience demand pick up consistent with the general manufacturing recovery.
Now I will turn it over to Tim for the financial review.
Thanks, Tony Good morning, everyone I'll.
I'll start on slide eight the income statement summary.
Net sales in the third quarter were $351 9 million and sales excluding surcharge totaled $298 1 million.
Sales, excluding surcharge were effectively flat sequentially on 5% of other volume.
Compared to the third quarter of year ago sales decreased 40% on 39% low volume.
As Tony covered in his review of the end use markets year over year decline is attributable to the ongoing demand headwinds in our key end use markets of aerospace and defense and medical.
The result of the global pandemic.
As expected the day.
A man with similar to our recent Q2 levels.
Given the current demand environment, we continue to actively manage our production schedules.
Focus on executing against our targeted inventory reduction program.
As we have said on prior calls while the reduction of inventory drives near term cash flow generation.
As evidenced by our liquidity position.
It negatively impacts our operating income performance.
SG&A expenses were $47 8 million in the third quarter down $3 million from the same period, a year ago, reflecting the actions, we took to reduce costs, including the elimination of about 20% of our global salaried positions late last fiscal year.
Managing discretionary spend closely as well as the impacts of remote working conditions, the reduced certain administrative costs, such as travel and entertainment.
Yeah.
Sequentially, the SG&A costs were higher by $5 6 million, reflecting incremental costs in the quarter associated with going live with our new ERP implementation as well of the incremental depreciation costs associated with the ERP system.
The current quarter's operating results include $7 6 million of restructuring and asset impairment charges, including inventory write downs.
Associated with our ongoing actions to reduce cost and narrow our focus and our additive business unit within our types of like.
In addition, our results for the third quarter include $2 7 million in COVID-19 related costs, which are down slightly from the $3 9 million of COVID-19 costs.
And our recent second quarter.
As a reminder, these costs include direct incremental operating costs, including outside services to execute enhanced cleaning protocols.
Isolation pay for employees potentially exposed to COVID-19.
And the additional personal protective equipment and other operating supplies necessary to maintain the operations, while keeping employees safe against possible exposure.
The operating loss was $40 million on the current quarter.
When excluding the impact of the special items, namely the restructuring and asset impairment charges and the COVID-19 costs.
Adjusted operating loss was $29 7 million compared to operating income of $58 $7 million on the prior year period and.
And adjusted operating loss of $32 3 million in the second quarter of fiscal year 2021.
Again, the current quarters results were largely in line with the expectations, we set at the beginning of the quarter and.
And reflect the impact of significantly lower volume compared to the prior year combined with the targeted inventory reduction.
Actually offset by the cost reduction efforts.
Although not shown on the slide in the current quarter. Other expense net includes an $8 $9 million noncash pension settlement charge related to our largest qualified pension plan.
In addition to recording the charge in the current quarter. We were also required to re measure of the plans net pension liabilities.
As a result of the Remeasurement, we expect pension expense to be lower by about $3 million for the full fiscal year versus what we had anticipated.
For clarity this reduction of net pension expense does not impact operating income.
Our effective tax rate for the third quarter was 29, 2%.
For the balance of the year. We currently expect the tax rate to be in the range of 28% to 30%.
Earnings per share for the quarter was the loss of 84 per share.
When excluding the impact of the special items adjusted earnings per share was the loss of 54 per share.
Now turning to slide nine and the <unk> segment results.
Net sales for the quarter were $299 6 million for $246 5 million excluding surcharge.
Compared to the third quarter last year sales, excluding surcharge decreased 38% on 37% lower volume.
Sequentially sales, excluding surcharge were essentially flat on 3% lower volume.
The sequential results reflect similar weakened demand conditions in our largest end use market of aerospace and defense.
As the supply chain continues to deal with near term reductions on OEM build rates.
This was partially offset by stronger shipments in transportation as North American light vehicle production continues to drive strong demand conditions for our materials.
As we get on a reported an operating loss of $9 9 million for the current quarter the.
The same quarter, a year ago and so he was operating income was $76 4 million in the second quarter of fiscal year 2021 as the year.
The reported an operating loss of $11 6 million.
The year over year reduction in operating income primarily reflects the impacts of lower volume as well as the negative income statement impacts of reducing the inventory.
Partially offset by the actions taken to reduce operating costs.
During the current quarter and I'd say, you'll reduce the inventory by approximately $15 million and year to date has reduced the inventory by $146 million.
Sequentially, the lower operating losses, principally the result of lower volume offset by a favorable product mix and a less pronounced the impact of the inventory reduction relative to the second quarter due in part of rising raw material prices.
In addition, the current quarter's results reflect approximately $2 1 million of direct incremental costs associated with our efforts to protect our facilities and employees in light of COVID-19.
This compares to $3 2 million in COVID-19 costs and our recent second quarter.
Looking ahead, we expect demand conditions across most end use markets will stabilize and begin to gradually recover beginning in the fourth quarter of fiscal year 2021.
Based on current expectations, we anticipate <unk> will.
We'll generate an operating loss of approximately $5 million to $7 million in the fourth quarter of fiscal year 2021.
For clarity I want to highlight a couple of key points in this guidance.
This estimate includes similar sequential COVID-19 related costs in the upcoming fourth quarter.
And second as we continue to reduce inventory, we expect that we will be required to record a non cash LIFO decrement charge in our upcoming fourth quarter.
Given the significant inventory reductions, we expect to generate for the full fiscal year. We are liquidating LIFO layers that include inventory costs that are higher than the fiscal year 2021 cost and as such a noncash charge will be recorded for the income statement.
The guidance, we provided excludes the impact of any non cash LIFO decrement charges.
Now turning to slide 10, and our Pep segment results.
Net sales, excluding surcharge were $64 9 million, which were down 39% from the same quarter a year ago.
And up 20% sequentially.
The year over year decline in sales of driven by market headwinds largely due to the global pandemic.
Additionally, sales in the energy end use market declined as a result of our exit of the of Mega less oil and gas business in the first quarter of this fiscal year.
The sequential increase in sales reflects increasing demand for titanium materials used in the aerospace and defense and medical end use markets.
In addition, our distribution business drove higher sales due to growing demand related to the strong activity in the automotive supply chain.
Lastly, our additive business saw a modest increase in sales as demand improved.
In the current quarter Pep reported an operating loss of $3 3 million.
This compares to an operating loss of $7 2 million in the second quarter of fiscal year 2021 on an operating loss of <unk> 3 million in the same quarter of last year.
The sequential operating results reflect the favorable impacts of higher volumes across all of the pet business units.
As we look ahead, we believe the demand conditions will gradually begin to improve in the coming quarters and we currently anticipate pep will generate an operating loss of.
Zero to $1 million and our upcoming fourth quarter.
Also as I mentioned for <unk>. The Pep guidance includes COVID-19 costs in line with the recent quarter, but excludes any non cash LIFO decrement charges.
Now turning to slide 11, and a review of free cash flow.
In the current quarter, we generated $4 million of cash from operating activities.
As you can see within the cash flow generated from operations, we continue to reduce inventory, although less pronounced than we have executed in the last several quarters.
Over the last four quarters, beginning with our fourth quarter of fiscal year 2020.
We have reduced inventory by just under $300 million, including $182 million of reductions to date in fiscal year 2021.
In terms of other working capital with the implementation of our new ERP system, we experienced some challenges with customer collections and reduced cash in the accounts receivable collections.
Those challenges are largely behind us and we expect to realize the benefits of the catch up on your upcoming fourth quarter.
In the third quarter, we spent $19 million on capital expenditures.
We expect to spend about $110 million to $120 million on capital expenditures for.
For fiscal year 2021, depending on the timing of certain projects expected to be completed in the balance of this fiscal year.
The actions we are taking the generate cash in the current environment have been essential.
It should not be of loss that we believe in the value of returning capital to our shareholders and despite the challenging economic conditions, we have continued to pay our quarterly dividend for shareholders.
The quarterly dividend demonstrates the confidence we have in our ability to deal with the near term impacts of market conditions on the long term prospects for our business.
With those details in mind, we reported negative $25 million of free cash flow on the quarter.
As I mentioned, we dealt with some challenges in the quarter related to cash collections of accounts receivable.
As we look at the fourth quarter, we believe we of address those challenges and we will continue to execute on opportunities for further inventory reductions.
With that in mind, we are targeting at least $50 million of positive free cash flow in our upcoming fourth Corp.
Some of liquidity perspective, we ended the current quarter with total liquidity of $539 million <unk>.
Including $244 million of cash and $295 million of available borrowings under our credit facility.
Keep in mind in the current quarter, we amended and extended our credit facility and reduced the size of our facility from 400 million the.
The $300 million, which is reflected in the sequential change in liquidity.
With that I'll move on to the next slide slide 12 to talk about our capital structure.
Over the years, we maintained the balanced view of capital allocation and.
And as the global pandemic emerged a little over a year ago.
Quickly shifted our focus towards building liquidity.
Which was enabled by our strong capital allocation philosophy.
In addition to the actions we took to reduce costs and focus on cash generation early this year we.
We took action to extend our maturity profile and add incremental cash to our balance sheet.
With our July 2020 notes offering.
This extended our notes due July 2021 to July 2020.
Last month in March 2021, we executed another important step on our strategy by completing an amended and extended credit facility.
The previous credit facility of a set to expire in March 2022.
The new facility matures in March 2024.
With those actions behind US we have no near term maturities and have significant liquidity with opportunities to generate even more.
With that I will turn the call back over to Tony.
Thanks, Tim.
As we all know different demand recovery timelines and customer ordering patterns will continue to influence of shorter term quarter to quarter mix.
I wanted to share a bit more on our enthusiasm related to mid term and longer term outlooks in the end.
The east markets, we serve.
Let's start with aerospace.
On the downturn, we continue to improve our already strong position.
The market participants and experts believe that demand will rebound to and through pre COVID-19 levels, which if you recall was already exhibiting constrained dynamics.
Longer term the industry will continue to need improved fuel efficiency and emissions driving the need for better engine materials, where we are strongly positioned.
The fence will continue to experience market resiliency on key platforms that require increases in strength toughness and for tea performance.
Longer term, we are monitoring funding patterns as the government's reassessed the budget after significant COVID-19 related spending.
In medical it's orthopedic and dental followed the cardiology recovery, we continue to secure additional share and identify more upside largely due to the breadth of the high value materials solutions, we offer.
Part of the industry innovation in this space.
Longer term, we see this continuing ex quicker patient recovery and improved patient outcomes will be the key drivers.
The transportation with the recovery well underway in North America, and China regulations drive the near term movement to higher efficiency powertrain, which is a positive for our portfolio of high temperature materials.
Longer term as electric vehicle adoption grows it is natural they will take more and more share away from the large internal combustion engine base.
We have a good view of the lifecycle of decline of those products on a balancing of focus accordingly.
As I mentioned earlier, our new Hot strip mill brings capability and capacity to support significant future electric vehicle volume growth.
Moving to the energy, which experienced a significant decline in demand this past year.
Auto practice of increased by 50% in calendar year 2021, and we have seen limited capital expenditures released for some major projects that offer up specific opportunities.
The fact that you will likely continue to be of supply and demand imbalance of over the next couple of years.
Longer term, we expect to see continued emphasis to move away from oil to natural gas and other alternative fuel sources.
And the industrial sub market, specifically the semiconductor in fluid control products the relatively steady demand we experienced through the pandemic is expected to increase driven by manufacturing for <unk> internet of things connectivity and more efficient powerpoint that required better performing materials.
The consumer Submarket is expected to continue its seasonal cyclicality.
We're seeing more and more applications ahead of hydro design envelope that required the removal of ways interference and that make use of raw materials to offer automated sensory feedback responses.
Longer term with the proliferation of digital and data management, we expect to see more devices with more sensors required exponentially more connectivity.
I've spoken on prior quarters about our soft magnetic product and the relevance within increasing electrification trends.
We believe this capability will well position us in the long term to capitalize on the growth in these areas.
The electrification space, we are participating in an increasing amount of prototype and initial low rate production of initiatives.
Utilize of products to provide power against the propulsion in a manner that relies upon the reduced mass or where there is limited space for the motor.
And we see current drone air taxi and other related applications of becoming more and more relevant, especially with options to extend the range of Bruce performance of be.
Exhausted.
And lastly in additive manufacturing, while we've seen some projects canceled or delayed indefinitely, along with some industry consolidation. We believe the competitive space has been narrow thus providing a focus on the value of our quality and lifecycle management platform for data and knowledge management will be vital.
To the success of any additive program.
Now, let's turn to slide 15, and my closing comments.
Despite the challenges of the pandemic has created we have continued to strengthen our foundation for long term profitable growth.
I'm proud that we continue to drive towards the goal.
<unk> injury workplace and debt all of our facilities have remained open during the pandemic.
The efforts of demonstrated the resiliency and commitment to our fellow employees, our customers and our communities.
We have adapted to new working conditions aligns our cost structure, and our manufacturing footprint to rapidly changing market conditions.
We've taken a series of steps to enhance our capital structure drive strong liquidity and extend our debt maturities.
Many of the third quarter with 244 million of the cash and over $539 million in total liquidity.
Our capital structure of activity combined with our targeted cost reduction initiatives place us on solid ground to not just manage through the downturn the emerge on the other side, a leaner more flexible and more productive company.
We've also deepened our relationships with our customers.
Across our end use markets remains in varying stages.
But we expect overall market conditions to continue to improve as we move through the rest of kind of a year of 2021 and into 2022.
Some markets will recover faster than others, and we are laser focused on capitalizing on the recovery as opportunities arise.
This includes our largest end use market aerospace and defense because of it.
Coverage is beginning to show signs of life.
We are working daily with our customers to align our production schedules with their material needs overall sentiment.
Since the trend upwards.
Our core business is established and built upon a 130 years of metallurgical expertise manufacturing and processing experience and a commitment to delivering mission critical solutions for customers and some of the largest industries in the world.
The strong core business will be supported over the long term by the targeting of investments we have made in critical emerging technology, including electrification and additive manufacturing.
Taken together, we believe our core business and next generation capabilities.
Mission is to deliver sustainable long term growth and value creation for shareholders for years to come.
Thank you for your time and now I'll turn it over for the operator to take your questions.
We will now begin the question and answer session to ask the question you've been press Star then one on your kind of on keypad each day.
On a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause monetary and the to assemble a roaster.
The first question is from Phil Gibbs from Keybanc capital markets. Please go ahead, hey, good.
Yeah.
Good morning filling for.
Hey, Tony can you give us an idea of.
What the what the overall backlog look like this quarter versus last and then also.
What what's your jet engine sales did either year over year quarter over quarter. Please.
So I'll start with the last one first you remember you asking that question.
Last quarter as well and engine sales were up 19% sequential quarter and I said not to get too excited about day just from the timing standpoint. So this quarter they were down about 18%. So over the last two quarters, you've seen it relatively flat on the engine sales, maybe a little bit of an increase on that.
In line with what we expected backlog standpoint overall on backlog was up about 6%.
Sequential quarter.
Thank you and then.
On the.
On the LIFO liquidation piece in Q4 any any sense.
Hey, guys in terms of what what we should what we should model in terms of an impact for Matt.
Yeah, So I'll take the on.
Just a couple of comments there one is most of our sales sales inventories on LIFO.
And on that as well as in past, so there's a bit in both segments.
As we've taken inventory down we're going to EBIT I've mentioned in my comments eat into some higher cost inventory.
So we expect the.
It's certainly at the estimate is very sensitive to where we wind up in ending inventory, but we would expect that to be somewhere in the neighborhood of.
For the the $45 million on most of that being in SCO with maybe $1 million or two in cash.
Now is that in your mind of one.
One time thing, meaning meaning.
Meaning we.
Meaning is there any recurrence or bleed into fiscal 'twenty two.
No we wouldn't expect it to bleed in the 2022.
Well, let's say one time, but nonrecurring.
Non cash.
Much of items in Q4.
And then last one for me.
The COVID-19 costs of $2 7 million did you did you say that that was there was about 2 million of NSA Oh on the rest of pop.
Yes, it's two one to one in Nashville, and 600000 impact.
On your inventory write down on it and restructuring impairment that you called out of new releases.
Where did those flow through the shows up in the corporate costs and the corporate cost number and Youre looking at the breakdown.
I appreciate it guys.
If you have a question. Please press Star then one.
The next question is from Gautam Khanna from Cowen. Please go ahead.
Yes. Thanks, good morning, following up on Bill's question.
Wanted to ask what the visibility of you'd mentioned on the engine side.
How far out can you see in terms of.
Delivery requirements of customers simply are asking about lead times.
Do you have visibility into calendar Q4 at this point.
Ed.
If you could also talk about the other aerospace sub segments of how they fared.
Sequentially in the March quarter, so fasteners and.
Other structures.
Hey, good morning, Gautam, we can see into our fiscal fourth quarter on the aerospace in fact on of bookings standpoint bookings for the aerospace were up 60% this past quarter and we see that trend.
Continuing some pretty good visibility there and close contact with the customers from a sales standpoint overall aerospace you can see on the slide was down 8% fasteners were up a couple of percentage points structural was up about seven.
The distribution was up three of two percentage points as well so all of the segments were up quarter over quarter engine of the only one that was down and that's just the continued the balance even with the corner of the form as I said on.
The second quarter, we were up 19% in this quarter Atms of the balance that out.
Point of to improve.
So all of the second throughout the quarter over quarter.
Okay.
Good day on the aerospace side.
The defense was the.
The defense was down just a little debt used to be fair quarter over quarter, but the aerospace segment.
Got it and then I was.
Of more curious about the edge of the visibility beyond fiscal Q4 into.
At the end of the calendar year, So just sort of what we can expect normally we have a big seasonal debt.
And in the second half of the year versus the first half on the back into the calendar year.
I expect that.
We will see I mean, do you have visibility into the second half of the calendar year right now of.
Of the ebbs and supply chain.
On the engine demand.
Yeah Yeah.
We do and the I've said this we're very close to our customers trying to.
The capture that in my remarks that the discussions are really around lead times of availability and when we see through this calendar year and makes it a bit in the calendar year 2022, as we start to.
Stack moves orders up a lot more discussion around Athens, So we had one provisional approval so.
To understand and get those qualifications complete.
Yes.
So from an overall standpoint of course I'd like for the visibility to be short term, but I think we're at this point in time, we have a pretty good idea of what our customers are at and as I said in the comments very bullish going forward. We do believe the debt we've hit the bottom much like many of the other cash.
The reported so far have had the same type of.
Messaging that we're looking for tenet to coming out of it.
And could you speak to the seasonal seasonality, we should expect in the second half of the calendar year should we see I'm not so sure of the client Im not so sure yes, sorry for interrupting I am not so sure about that I mean, that's been a bit muted. The last couple of quarters I mean, the last couple of years as well.
As we come come in.
So always some summer shutdowns may be in the transportation side, but I think youre going to see a lot of those manufacturers.
Short end of summer short shutdowns, just because of some of the shortages in the pad with chips.
Run maybe stronger than what they have in the past so.
At this time I don't I don't see a material impact because of seasonality.
Okay. Thank you very much.
Thanks Scott.
This concludes our question and answer session I would like to turn the conference back over to Bob Edwards for any closing remarks.
Thanks, operator, and thanks to everyone for joining us today for our fiscal third quarter 2021 earnings call. We look forward to speaking with all of you in the near future. Thanks, again and enjoy the rest of your day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Okay.
Cash flow.
Of course.
Okay.
Yes.
Sure.
[music].
Okay.
Yes.
[music] on mining.
The market.
[music].
On.
Thanks.
On.
No.
Yes.
Sure.
Yes.
Non.
Okay.
Net loss.
Yes.
Maintaining low.
Non-GAAP.
Sure.
Okay.
Thanks.
On line.
And on.
On that.
Okay.
Yes.
Net.
Thanks.
Thank you.
Yes.
Yes.
Okay.
Average.
Yes.
On a year.
And the way.
Yes.
[music].
Right.
Good day.
For example.
Sure.
Okay.
Yes.
Okay.
Yes.
Thank you.
Hello.
The year.
No.
[music].
Okay.
Okay.
Okay.
Okay.
Yes.
Right.
Yes.
Okay.
On.
Yes.
Sure.
Moving on.
Good day.
Yes.
Right.
And.
Okay.
And then on that.
The Missouri.
Yes.
The issue.
Okay.
Okay.
[music] on whenever we can.
Yes.
All of them.
Yes.
[music].
Okay.
Yes.
Jamie.
Net.
Okay.
The acquisition.
Good day.
[music] index.
Yes.