Q2 2021 Aaon Inc Earnings Call
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This is the operator todays conference call is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.
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Good morning, ladies and gentlemen, and welcome to Aon Incorporated's second quarter sales and earnings call. There will be of questions and answer period. After management's brief presentation. This call will last approximately 45 minutes to and our I would now like to turn the meeting over to you Gary feel.
<unk> CEO and President. Please go ahead.
Good morning, Thank you for joining us I'd like to begin by reading our forward looking disclaimer.
A reminder to the extent any statement presented here and deals with the information that is not historical including the outlook for the remainder of the year such statement is necessarily forward looking and made pursuant to the safe Harbor provisions of the Securities Litigation Reform Act of 1995, the Securities Act of $19.33.
And the Securities and Exchange Act of 1934, each as amended as such it is subject to the occurrence of many events outside of <unk> control that could cause <unk> results to differ materially.
Really from those anticipated.
Please see the risk factors contained in our most recent SEC filings, including the annual report on form 10-K, and the quarterly report on form 10-Q.
Today, joining me on the call our executive chairman enormous the aaronson, and our Chief Financial Officer, Rebecca Thompson.
Rebecca will open by reviewing our financial performance Rebecca please thank.
Thank you Gary.
I'd like to begin by discussing the comparative results of the 3 months ended June.
The 30th 2020, 1 versus June 30 of 2020.
Net sales increased 14, 6% share.
And $43.9 million from $125.6 million the year.
Year over year increase was driven by robust replacement demand broadly across our nonresidential building market.
Production rates are also contributing factor as we did not experience COVID-19 related apps.
The way absences like we did in 2020.
Also the 4% price increase we implemented in early January was a driving factor all of these items are partially offset by changes and the product mix to lower priced units.
Our gross profit increased 10, 4% to $42.1 million from $38.1 million as a percentage of sales gross profit was 29, 3% and the quarter just ended compared to 34% and the second quarter of 2020.
The slight decline in gross profit was mainly related to higher material costs.
Selling general and administrative expenses increased 6% to $16.9 million from $15.9.002 million 20, as a percentage of sales SG&A decreased to 11, 7% of total sales and the quarter. Just ended from 12, 7% and the second quarter of 2020.
SG&A as a percentage of sales decreased as we did not have the 1.25 million donation, we made in 2020 'twenty of Fred Public School.
Income from operations increased 13, 6% to $25.2 million or $17.5 percentage of sales from $22.2 million or 17, 7% of sales and 2020.
Our effective tax rate was decreased to 18, 3% from 20%.
The lower tax rate was mainly related to lower corporate income tax rates and the state of Oklahoma that was signed into law. During the quarter. This resulted in a 1 time benefit of.
The other point 8 million the company's estimated annual 2021 and effective tax rate excluding discrete events is expected to be approximately 25%.
Net income increased to $20.6 million or 14, 3% of sales compared to $17.8 million or 14, 2% of sales and the first quarter of 2020.
Diluted earnings per share increased by 11, 8% to 38 cents per share from 34 cents per share and 2020.
Turning to the balance sheet, you'll see that we and our working capital balance of $180.6 million versus the $161.2 million of December 30, <unk> 2020 unrestricted cash totaled 111.4 million of June 30th 'twenty 'twenty 1.
And from $79 million at the end of 2020. Our current ratio is approximately $3.3 to 1 of our capital expenditures were $33.2 million for the 6 months ended June 30, 2020, 1 we expect capital expenditures for the year to be approximately $70 million.
The company had stock repurchases of 10.
And 3 million during the 6 months ended June 30 of 2021 shareholders' equity per diluted share is $7 and 14th of June 32021, compared to $6 and 67 since December 31 and 2020.
I'd now like to turn the call back over to our CEO and president and Gary fields.
And I'd like to start off by saying that the second quarter was a bit better than we expected.
Organic sales were up year over year nearly 15%.
And this is quite noteworthy for us because we're not facing the same easy comparison to 2020 that some of our nonresidential market competitors.
The experienced.
A great deal of the.
The competitors are.
Peers, and the HVAC market were down and the 20% to 25% range and.
2020, so its an uneasy upside for 'twenty 1 for them.
On the other hands and we were up 5% and second quarter 2020 compared to the year before.
So compared to our second quarter of 19, which is where I'd really like to go back and talk about because that takes us pre corona virus, our sales and second quarter 'twenty, 1 we're up over 20% versus 19 looking at it the same way the industry sales as an industry we're down either.
Flat to slightly down versus 2019. So this is quite an accomplishment that we've achieved.
The other thing is is.
We ended the year with our backlog at a lower level than was the ideal and we had ramped up production significantly which was a great thing and the orders had slowed down a bit well orders resumed right. After the first of the year on a brisk pace.
The backlog on June 30 of 2021 is the $138.1 million, that's 35% up year over year and 43% up over the end of the first quarter.
The orders are up year over year, 70% in the second quarter. So we see no debate and slowdowns whatsoever talking to our sales channel the pipeline is very robust.
Robust and.
And so we're in and real good shape going forward the August 1st backlog and.
And was only slightly down from the end of June.
But it was still in the 130 million range.
I think it was $134 million.
So we're maintaining a brisk pace of manufacturing as the.
Evidenced by the record quarter of bookings are very brisk, our backlog is very robust and so going forward the rest of the year.
We're looking at things to Oh stay steady to maybe slightly strengthening if the labor market was just a little more favorable for us to get more people than we would be prepared to accelerate even more but we're in a very tight labor market right now and I think that's industry wide I hear of.
A lot of people talking about it.
So oh wanted to say that the replacement market demand has been much much stronger historically had been about 50% replacement, 50% new construction. Thus far this year, we're running and the low to mid 60% range, I think 64% to 68% swinging back and forth through.
There are on replacement and this has.
Been a dedicated effort of ours that we put in a distinct sales channel.
The guidance to and support to make this happen and were seeing the results and we're very pleased with that now the new construction outlook is as bright as it's been in a very very long time.
Architectural billing index Dodge index construction starts all of these indexes are up substantially architectural billing index has been up for several months in a row now.
Think it's approaching 5.5 months the architectural billing index has been up and I think the Dod.
Dodge analytics support that it's actually getting into construction.
So we're looking at all of our segments and as we normally distribute the commercial and retail is is actually a little better than we anticipated office buildings are not horrible theyre not great medical and healthcare is much much stronger than it's been in the past of course educate.
And as always been a very strong thing for Aon continues to be and with the focus on indoor air quality and some federal funding to help them with that we look for that to continue and accelerate.
Manufacturing has been.
Just kind of decent I won't call it good or bad lodging again has been a bit of a surprise.
Not only if we renovated through the replacement market a lot of lodging facilities, we're actually seeing a few new and it's being built so that's kind of where our markets are not I guess I left 1 out of the grow facility market. That's been more robust in 'twenty, 1 and then it had been in the recent few quarters.
So our margin continue to March on a we were 29, 3% versus 34, a year ago. It was a little softer than we hoped but overall considering inflationary pressures I think we did a very good job.
<unk>.
Where we had materials that were costing us more we gained labor efficiency and manufacturing efficiency. The the way we measure our manufacturing efficiency inside here.
Picked up several.
Percentage points of improvement.
And <unk>.
The cost of goods sold our materials components were down year over year, 1%.
The June and September price increase the those have positioned us to maintain or possibly improve our gross margin second half of it.
We expect most of that the happened in the fourth quarter and going into Q1 of 'twenty..2 so our timing typically because of our lead times, our average somewhere around 8 weeks, maybe 10 weeks. So when we have of price increase it takes 8 to 10 weeks to flush the other.
All of the existing backlog through and get the new backlog out on the plant floor. So just time that June 1st we had the price increase so about today would be about when we would start seeing that price increase hit the floor. So roughly half of our Q3 youll see that.
4% price increase we did have some pressures with some additional wage.
Wage rate of wages increase.
We did this to maintain our competitive position and the labor market we are.
Have had some success with that and.
And I look for continued success.
I think we're doing an excellent job of managing ex SG&A.
<unk> up 6%, but 15% sales growth so that was not a linear.
The tracking it was it was less and not which is always a great day.
Oh.
Both Tulsa and long view have seen a general productivity improvements.
The average head count across both operations combined is down about 5% year over year.
The long view head count is up and all of the new building that we put in we were able to get ahead of the curve and get some people in and tell us is <unk>.
The count is slightly down.
So we've seen Oh.
Share gains and.
And our.
The multiple areas of our water source heat pump sales were up.
69% versus this time last year.
<unk> got the newest AHRI data just yesterday and it showed about a 1.5%.
Of the market gain.
So we were going from about 6% to 7.4 I think what it was parts sales. This is another wonderful occurrence for US. This was the very focused activity along with our replacement market. We've put in some very nice and enhancements for the sales channel some support.
Structures and some planning structures, so parts sales were up 42% year over year.
The last year parts sales were down at this time people weren't working on their building so much so.
Have a how thats relevant to 2019 other than I can tell you that part sales are at a record level. So.
So I know that we're well ahead of 19 and 20.
Air handlers and condensing units the sales were up 38%. This is reflective of a couple of things 1 is our product.
Has become more and more appreciated because we have.
Air source heat pumps and that has some very very good operating characteristics to control the humidity as well as be of heat pump and some larger sizes of the other thing is the new facility that we built and long view has given us the capacity to meet the demand we are ramping up that facility and doing quite well with that so we're.
Continue to invest.
Invest.
Rebecca has said that we expect to spend $70 million in 'twenty, 1 and we were in the mid low to mid Thirty's 33, 33 at this point so.
So that'll be both refreshing some of equipment, that's a little slower or worn and aged out and also a little bit of accretive our manufacturing capacity so heading into the second half of the year, we're quite optimistic.
Orders and backlog trends are strong while theres some inflation headwinds that are a little bit of a challenge.
We think we're ahead of that with our pricing and.
And so we believe that our margins will.
Improved slightly throughout the year and and in the year, just slightly above our traditional target.
In general, we expect sales and earnings to improve all through the second half of the year and going into the first part of next year because of the 5% price increase across the board goes into effect September 1 we're not going to see that in the.
Plant floor until.
The very end of of Q4.
And it'll be more material in Q1 of 'twenty 2.
Unlike most years, where we've had a little bit of a bell curve, where Q1 and Q4 were.
Down several percentage points and revenue versus Q2 and Q3.
We're looking for Q3 to be at least comparable to <unk>.
Q2, with the slight increase and.
And we're looking at Q4.2 and.
And all likelihood be comparable to that so we've kind of hit a rhythm here that were looking for.
<unk>.
2.3 and 4 to be Oh, and stack up relatively close to each other with maybe slight undulations, but nothing substantial.
It won't be because we don't have the orders and the bookings that will be.
Things that are totally outside of that like.
Q4 has more holidays and it in Q3, so it will be 1 or 2 day short of manufacturing because we do manufacture 7 days a week and so.
So the that'll.
And that will affect it by a few dollars.
But otherwise I think we're in very very good shape.
So we will take any questions now.
At this time and ask a question you will need the press star 1 on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Your first question comes from the line of Julio Romero with Sidoti and company.
Good morning, and Julio.
Good morning, Gary Rebecca norm or are you more in the morning.
So I guess my first question is just on the increased volumes and the quarter of the increased production could you rank order. The you talked about the return to historical employee retention.
Historical and employee levels and increased manufacturing capacity can you just kind of rank order the 2 of those and.
Talk about how they impacted volumes in the quarter.
Yeah, well first off.
The new Longview facility.
And is so much more ideal and the old facility was that we're producing.
All of them.
And I think the casual mass sit around 27% to 28% more with the same number of people now and we have more people. There. So we're producing even more than that but we've had a very nice gain in our longview facility with the new the new plant.
And and.
That is primarily related to the infrastructure and the arrangement now we have added a few people and long view versus a year ago. They are in the positive range by maybe 20 to 30 people I think is what it is in.
And Tulsa, however were down and probably.
30, or 40 people versus last year on the plant floor.
And yet we're producing at.
Very very high level here as well and that is and attribute to <unk>.
The manufacturing engineering group and the manufacturing group.
And that have separately gone through and refined all of our processes cleaned up a lot of Lucy and.
The things that we knew were beneficial to the company that would make us more efficient. So we're several percentage points more efficient with that labor here, we measure it on a dollars of revenue per person on the plant floor and that dollars of revenue per person on the plant floor.
Let me hit of calculator here real quick and I'll give you of.
Percentage on that.
I know what those numbers are.
It's about 8% and.
Improvement in our.
Revenue dollars.
And on the plant floor and this is absent of the price increase I took that into the account in that calculation. This is actual material going out the door. So.
To answer your question, if we had more people we would go up linearly because the infrastructure is in place Everything's here, we could use about 200 people in Tulsa and about another 50 and long view and.
And we would.
Generate very nice revenue with those very nice profits because we absorbed a lot of the fixed cost.
Yeah.
Got it that's very helpful and just thinking about the order growth. It's it's very robust obviously sequentially.
For the last 2 quarters and.
And you touched on the increased manufacturing capacity.
And how labor stands today, I guess given all of that.
How do you see.
And there is trending sequentially throughout the next few quarters.
Well I think the rate that we're booking will maintain relatively steady for the next.
A couple of quarters. According to the the intelligence we have gathered.
And from our sales channel partners and what they tell us is and the pipeline theres.
There's many drivers to that but 1 of the key drivers is our lead time, whereas a couple of years ago. Our lead time was very onerous to our efforts and.
And our sales channel partners told US, we lost over $100 million and bookings opportunity because of that poor lead time, they had to turn that many orders down.
And while this year.
100, and whatever million dollars and.
And bookings, but we're approaching that.
We're somewhere around 80 million above last year, I think I was thinking.
Yeah.
And so I think lead time has been.
A very motivating factor to that now there are people that have always wanted a on equipment and we're even willing to pay for it but they werent willing to wait for it that's the the people that are different this year than we were a couple of years back so.
We have a handle on the production needs we have surplus capacity.
And the infrastructure and now that we have behind us the federal government subsidy to people not working.
It seems that we're maybe gaining a little ground on that.
That only ended.
About 5 weeks ago here in Oklahoma and also in Texas. It was right at the end of June but we've seen.
A very noticeable increase and applicants and qualified applicants. So I have great confidence that we will continue to service our market with acceptable or even.
Appreciable appreciative of.
Lead times people appreciate the lead times that we have.
Got it.
Just to clarify the.
The rate of bookings could continue to rise sequentially.
The rate of bookings I believe is going to stay relatively steady.
So if we would look at our rate year to date.
And on bookings then it looks like that stays relatively steady and.
And like normally.
About this time of year, we see a decline in bookings rate.
But at this point and time, we've not seen a decline in bookings rate and the pipeline is telling us it's going to remain at this steady rate.
And youre looking at that come out of a year over year basis or.
I'm looking at that 4 of the past 6 months basis for our rate.
Okay. Okay.
I guess.
I'm nitpicking of what could go wrong, I mean everyone's suffering from industry wide supply chain.
Great.
The non labor I don't know [laughter], the what could go wrong list is very long and you know that.
That's the extensive I mean, we got this delta of variant that's going around you know what 1 of our plagues of 2020 that could turn into a blessing of 2021, because we had a significant number of our people on the plant floor that had coronavirus in 2020, if you'll recall from about mid June the mid July and 2020.
We lost hundreds of people that either had it or thought they had it and decided to stay out of.
The other thing is is that we had vaccinations available here at the plant we had of.
Health care facility that brought mobile vaccinations into the plant and we had several hundred people that took advantage of that so I don't know what our percent vaccination is out there.
But if I was to make just a little bit of napkin math gas and say between those that have had the virus and.
And those that have been vaccinated, let's.
I'd say, we're we've got herd immunity.
And we're looking real good.
Do have a spot here and there where we've got a couple of people out even at this point and time.
But you know something like that could could definitely rear its ugly head again.
Supply chain.
We are and a very very good position.
Set down with with that group earlier this week to review everything.
We have.
And the unusually large inventory right now.
If you look through the Q youll see what sort of inventory $83.87 million something like that.
$87 million to $87 million.
That's not ideal in terms of best use of cash.
Like for that to be more like 10% of revenue should be down and the $50 million to $60 million range, but I'm going to tell you in 2021.
And I'm the proud of this guy on the block the have $87 million because I can build equipment and we've had some irritants from supply chain, but we haven't had anything that's plagued us and shut us down and and you know some of these things, but there's a myriad of things that could go on out there that are.
You've never seen before maybe you've seen them and they came back but.
We are of high level of confidence, we want and went through 2020 with around 10% growth in the face of all of our competitors essentially were down 15, 2025%. So we operated and navigated through that very nasty rough condition better than most and so I think the.
Team is very strong very capable and that we are continue to navigate through all of those obstacles with great skill.
Thank you for the color there and just last 1 I had just you.
You mentioned $87 million of inventory I imagine.
All things considered in this environment you'd rather have.
A little more inventory than you need the did not I mean, how are you thinking about those inventory levels.
Absolutely you know.
I went through there.
We have not had any supply chain issues that have slowed us down.
We have had a buffer so when.
We had 1 of our suppliers of compressors that was having problems getting some insignificant little component the kept them from completing the compressor for instance, and.
And they said we're going to be delayed 2 to 3 weeks on this next shipment while I had 4 months of inventory here.
That particular compressor.
And so that 2 or 3 weeks didn't do anything to us. It was innocuous. These people that are running closer to just in time on their inventory.
And they are looking at a bunch of units they can't build so I'm very proud of what our.
And our purchasing department and logistics control. The department has done and keeping US ahead of these issues steels. Another 1 I hear people talking about Oh, I can't get steel.
We don't not only have this place full of steel we got warehouses full of steel already paid for waiting on us.
So we're in very good shape.
Great I'll hop back into queue and thanks for taking the questions.
Certainly.
Again, please press star 1 to queue up for questions.
Your next question comes from the line of Jon Braatz, with Kansas City capital.
Good morning, everyone.
Morning, John.
Gary I have a question and maybe norm can chime in too we.
We saw a dramatic shift and the mix and this quarter 2.
And so a lot of lower price units I guess historically have you seen such a shift before and is it the drug is it being driven by the replacement market.
The business being so strong.
And it's being driven by 2 things John and.
It's being driven.
This quarter.
And that we just reported was driven by the the K through 12 school business and.
And a significant portion of that was replacement versus new so what happened there in my opinion was the demand for better indoor air quality.
And the things that I have touted that E. On has a very very strong capability of and our inherent design very desirable a lot of schools said, we're going to replace our units and.
And.
We want a on units and we had lead time available we had the kind of equipment that they want it available and we were able to service that.
And we got 1 order from 1 school district, and North, Texas. It was 811 units and there were only like 5 skus on the whole thing.
So it was the this is what generated more of those small units was that K 12 business that we serviced.
John Yes of the norm.
Goodbye everyone.
Yes.
Alright.
Hum.
Would you or Gary would you expect net.
To continue.
And that mix.
Well I think the mix will balance out to more traditional going for the rest of the year.
Oh.
It's still going to be biased somewhat towards the smaller units for a little while.
But it'll start.
Swinging back towards mid size to larger units as of a higher percentage of the mix the balance of the year, because we've completed delivery of the vast majority of those schools now a lot of that delivery took place in July.
July and August so the the first month and a half 2 months of this quarter and that's why I say, it's beginning to swing now you know when I look at the line rates for the various manufacturing lines that make the different size units and seeing the smaller unit.
The line.
The daily rate slowed down just a little the mid size and larger line pick up a little.
I will say this is kind of of balancing quarter right here in Q4, I think will be spot on normal from everything I can see okay. Okay. Secondly.
And last night I went back and looked at some of them.
Early.
The things that I made.
And I wrote on the water source heat pump.
And you know at the time when it was first introduced and the opportunity was around $100 million.
And you know and that was and over a 3 to 5 year time frame and.
Gary we're sitting at 25 million now maybe for the full year I think that's sort of what the.
My number show.
And.
It's manufacturer and doesn't seem to be the problem anymore.
As it is.
Is it going up what's the what's it going to take to get the.
Millions is that still a goal.
Have things changed maybe competitively or anything like that that the.
Maybe he's going to make it tougher to get that of $100 million is that really still and opportunity.
It is absolutely still and opportunity and I've described it.
For the past 2 or 3 quarters.
What we did was we sat down and and went for a clean sheet design.
Took all of the input from the market on all of the desirable features and characteristics that they wanted and Thats, what we designed and introduced.
And we were a bit naive to the fact that about 75% of the overall market 60% to 75%.
His replacement market.
And when they replace these the configuration needs to be as near identical as possible because they have minutes or hours to replace these things not days and weeks and.
So we didn't take that into account with our initial design.
Our initial design has maintained a very nice rate of of sale of.
And where we have people that like all of those characteristics. We designed into it. So we're going to continue to offer our initial design because it is very <unk> like you said about 25 million of year.
But in order to get to that bigger and bigger part of the market and.
And those numbers work out exactly right, if it's 25% new construction and 75%.
The replacement market and we need to be at a 100 million. We're at 25% of that Mike 80, something percent of our units are going and new construction net.
Near I mean near all of our units are going and new construction. So we have we're closing in on finishing the the design testing implementation of.
Of our Backwardly compatible ideal replacement unit, where having a sales meeting in early October and Grapevine, Texas.
It's our intention and our goal to introduce that new line to our sales channel partners. There, we only have a national sales meeting ever 2 or 3 years, we make sure that.
When we do that we've got a significant number of advancements and new things to share with them and so that's where we're at this year and.
And this water source heat pump line will be shared with about 1000 and sales channel partners.
Individuals.
And in October.
October and Thats 3 day sales meeting and.
And I look for 2022 to resume the growth of the water source heat pump business. Okay. So the.
The design and the manufacturing.
Is all completed or nearly completed so that you'll be ready to go our beginning of the year.
Yes.
I checked in on that again earlier this week to make sure that our October sales meeting we would have all of the testing all of the data all of the marketing materials everything for the full.
Oh rollout, we will have a full rollout and <unk>.
Early October if net sales meeting complete ready to go okay. Okay, Alright, Gary Thank you very much.
Thank you John.
Your next question comes from the line of David Darmon with Green Summit.
Hi, Gary Hello, David kind of year to day.
And I'm good I appreciate it.
I wanted to make sure I understood your thinking in terms of how much backlog in terms of weeks.
Of revenues Youre looking to keep it I don't remember exactly I think in the past you had wanted to keep maybe somewhere in the round of 8 weeks of of capacity and backlog, but it seems like that's a moving target as you ramp up your capacity and your production and efficiencies. So could you update us on that please.
Well your numbers are almost exactly right ideal backlog would be about 8 weeks.
And because our production continues to increase now we've got substantial infrastructure in place that we don't have enough personnel to fully utilize.
So our.
And our ramp up is <unk>.
Much quicker now than it has been in the past.
3.4 years ago, we were behind on infrastructure and that's why we built the new building and long view, which was the 3 year endeavor start to finish and Thats why we went through and cleaned up the Tulsa facility and added a lot of production here.
So we can ramp up faster than we could in the past.
<unk>.
But.
Our ideal backlog right now would be 8 weeks now I will tell you theres, a little apparel with 8 weeks across the board.
And your high volume moving products the smaller size units that that's not a problem whatsoever 6 weeks 8 weeks as all all of the same it's fine.
But when you start getting into the larger size units that you have lower volumes and its really hard to have and inventory some of the unique parts that it takes to build those units and.
And.
The supply chain and being a little cloudy right now for some of those low volume components.
It makes it a little more difficult.
I will say as a total of tranche 8 weeks is ideal, but if I divided that up from product lines. The smaller lines would be 6 weeks and the larger lines would be maybe 10 or 12 weeks.
Okay. So.
At a blend right now you look like you're about call. It 12 weeks on back of the envelope math, where backlog and sales of roughly similar right now.
Yeah. So right now our published lead times across the border with rare exception of 10 weeks and the reason for that is as project planning.
So some of this backlog we have due to project project planning they have the order and here, but we allowed them to put a date that's longer than lead time.
So that they get their spot in the waiting line.
We've got some projects that had been delayed because they can't staff them. So they've moved a little bit, but if you looked at it and simple like you said back of the envelope math. It does look like somewhere around 12 weeks, but.
But when you look at it on a production schedule Youll see that we publish and 10 weeks and everything is in the green.
Little in the Red as far as being tardy.
Commitment.
Got it.
And if I understood your comments earlier on the call appropriately you're looking for your your order signed to continue at roughly the similar pace and the second half of the year that they signed and the first half of the year and <unk>.
Very simple math, you signed about $320 million and orders and the first half of the year.
So if I assume something similar and the second half of that's another 320 million you thought your sales may maintain at roughly the current rate, which is call. It 280 of $290 million.
It seems like another 30 of $40 million of.
Backlog might accrue.
And your backlog might end up it seems like closer to 11, and 12 weeks, if I'm understanding but.
Yeah.
And you've got the bookings a little off okay.
And looking to August 5th year to date totals $335 million.
Okay. That's already 5 through August 5th that's really helped yeah, yeah, Yeah, that's through August 5th.
So I think when and when.
When you go back and cycle that through.
Let's see here that's.
And I don't have I've got a month to day to average, but I don't have a year to date of average.
You know I see that that's plus $91 million versus a.
A year ago.
And that for you.
Yeah, but if I.
I don't know, how many days and the year there is.
The August 5th.
217 days so.
If I'm just doing what's the 3.
35 divided by 217 give me that 1 while you're doing the math I'm sorry, sorry, Yeah. I took the 365 on 217 gets you to if I'm following.
Order signed of call it $615 million or so.
Well, it's $3.35, not 365, 3 and while I was doing strict days right.
I Gotcha, gotcha, okay, well and and.
And we only have 355 days.
We had 10 days of the holidays that we don't book Okay. Okay. So.
If I call it.
You know $600 million, plus and minus of bookings.
The revenues to date are of call. It 260, plus you're thinking you might to roughly another 2.
290, and the back half of the year roughly.
We get you to about so the.
2 fish.
Yeah, It would be roughly equivalent I guess for the back half.
And it wouldn't really expand dramatically okay.
That's what that was my math.
Really appreciate your help.
Yeah Man.
And so yeah. There's a lot of obviously you guys are ramping pretty rapidly. So it's helpful to understand.
Yep.
Well great. Thank you.
Mhm.
Again, please press star 1 to queue up for questions.
Okay.
You should read it.
Yes.
There are no further questions I will now turn the call over to Gary fields for any closing remarks.
Just wanted to clarify 1 thing.
And in my prepared commentary I said when talking about productivity of said materials were down 1% what I meant to say was our cost of goods sold excluding our materials were down 1%. So just clear up that 1 little thing there.
Alright.
With that.
We'll close we appreciate everyone's interest in Aegon and calling in.
We.
Looking forward to talking to you.
Again in November for our third quarter results have a nice day.
Yes.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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