Q3 2021 Vontier Corp Earnings Call
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My name is Emma and I will be a conference facilitator. This morning at this time I would like to welcome everyone to the volunteer Corporation's third quarter 2021 earnings results Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question answer session.
I would like to ask a question during that time Semiprecious Star then the number one on your telephone keypad, if you'd like to withdraw your question press the pound key.
I'd like to turn the call over to MS. Lisa Curran, Vice President of Investor Relations Ms. Curran you may begin.
Thank you Anna good morning, everyone and thank you for joining us on the call with me today are Mark Morelli, our President and Chief Executive Officer, and Dave named our senior Vice President and Chief Financial Officer, We will present certain non-GAAP financial measures on today's call information required by SEC Reg.
<unk> G relating to these non-GAAP financial measures is available in the investors section of our website.
Www Dot volunteer Dot com under the heading financials.
Please note that unless otherwise noted the presented financial measures reflect year over year increases or decreases.
During the call we will make forward looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future.
These forward looking statements are subject to a number of risks and uncertainties and actual results might differ materially from any forward looking statements that we make today.
Information regarding these factors that may cause actual results to differ materially from these forward looking statements is available in our SEC filings and subsequent quarterly report on Form 10-Q.
These forward looking statements speak only as of the date, they're made and we do not assume any obligation to update any forward looking statements with that I'd like to turn the call over to Mark.
Thanks, Felicia and good morning, everyone I'm very proud of our third quarter performance. The team is making significant progress towards our profitable growth initiatives and portfolio diversification through the course of 2021.
The team's exceptional execution features continuous improvement and deeper deployment of the bond peer business system.
We delivered another quarter exceeding our guidance on all metrics, despite a very challenging backdrop.
We achieved nearly a point of core revenue growth and nearly 10% core revenue growth excluding E. M D.
Given the supply chain headwinds that every other company is also encountering I believe the real standout measure for volunteer this quarter is our margin performance.
We drove 90 basis points of adjusted gross margin expansion and 70 basis points of adjusted core operating margin.
This strong performance driving our earnings growth reflects the efforts by our world class supply chain team and Swift price and specific actions taken across the businesses.
Counter persistent inflation and worsening material availability as well as labor shortages.
Demand for our solutions is solid with order growth, excluding the and be up mid single digits and our ability to price continues to outpace inflation.
We've managed positive price cost even in the face of dramatic cost increases associated with expedited freight, but it's becoming more and more challenging given the pace and rate of the inflationary and logistics headwinds.
And while we were able to reduce backlog during the quarter levels remained elevated and so at the end of the day, our ability to deliver growth really comes down to the availability of materials.
As many of you know the volunteer businesses are short cycle, and we are continuing to derisk, our supply chain through our simplification initiatives and by leveraging local partners with a diverse network.
We're hyper focused on securing the supply base.
Daily management, one of the Hallmark fundamentals of our business system is critical to our success in this environment.
Global Cross functional teams are collaborating virtually in real time to navigate a multitude of issues for example, procurement and R&D engineers dynamically problems solved and rewrite software to accommodate alternative components were.
We are shipping by air when necessary, we operate with long term value creation as our highest priority and that's our mantra is delivery ahead of cost.
To that end, we remain diligent in our efforts to capitalize on growth opportunities. This was clearly evident at our recent DBS growth and innovation conference. We had nearly 70 of our senior commercial product and engineering leaders together to share best practices.
Teen shared lessons learned ranging from simplification to improve focus and lean portfolio management to experimentation and digital transformation.
G B our leaders shared how they utilize an agile development process to collaborate closely with customers and to accelerate new product time to market.
The recently launched Monte your data and analytics hub helped automate complex analytics to reduce cost and respond to customers much more quickly at GTT.
There are many more examples like these to illustrate how we're building better innovation capabilities.
Importantly, our effort to improve return on every R&D dollar invested are gaining traction and I look forward to keeping you updated on our progress.
In September.
Completed our annual strategic reviews for the first time as a stand alone company I've never been more excited about our organic and inorganic growth and portfolio diversification opportunities as these reviews highlight the strength of our positions and the runway potential in our markets.
Our recently closed acquisition of DRP exemplifies the playbook importance of focusing on attractive markets and company characteristics that deliver value.
The <unk> team is making an immediate difference I'm excited about the depth of experience they bring with predictive analytics and behavioral economics there.
They are uniquely engage and understand the consumer and deliver solutions to their customers solving high value problems.
They've invested wisely for growth and you will learn more about their high value workflow solutions and innovative business model and just a couple of weeks during the retail solutions virtual keygen.
Moving to the outlook.
Our full year 2021, adjusted diluted net EPS guidance to $2 82 per share to $2.86 per share to include the impact of TRP dish.
This represents year over year growth of 14% to 16% or greater than 20%, excluding the expected impact from E. M D.
This includes continued assumptions for high single digit core revenue growth and core adjusted operating margin expansion greater than 125 basis points.
We expect free cash flow conversion of approximately 90% to 95%, reflecting the lack of linearity due to the supply chain pressures on working capital.
Yeah.
And just as we communicated at the beginning of the year. The tale of two halves comparison dynamics provide the best perspective for the second half growth rates.
With that backdrop as a reminder.
We are initiating our fourth quarter adjusted diluted net EPS guidance of 77%.
This assumes a mid single digit core revenue decline.
And 50 to 75 basis points of adjusted core operating margin contraction.
As we look to manage the decremental in the 30% range.
We believe the unprecedented supply chain constraints limit upside opportunity, making the middle of the EPS range the highest probability outcome.
With that I'll turn the call over to Dave to provide the financials. Thanks, Mark adjusted net earnings for the third quarter were $137 million, an increase of 2% from $134 million in the prior year period. This translated to adjusted net earnings per share of <unk> 80 sets. The increase in earnings was primarily.
Driven by continued growth in our non <unk> businesses, and strong price, which offset impact of material inflation, resulting in strong fall through and approximately 70 basis points of core adjusted operating margin expansion in the quarter.
Core revenue growth in the third quarter was approximately 1% amid strong demand and against a prior year Q3, which benefited from a sharp recovery from the pandemic lows as well as regulatory driven demand in North America and in the high growth markets. The tale of two halves as we've referred to it sequentially revenue grew.
Single digits Directionally consistent with our historical seasonality.
In the third quarter core revenue growth was driven by our non <unk> businesses, which grew approximately 10% and was mostly offset by the anticipated roll off of <unk> and the regulatory driver in Mexico, which benefited the second half of last year.
Adjusted operating profit for the third quarter was 188 million growth of 4% compared to the prior year period, primarily driven by revenue growth and solid operational execution as we manage through persistent inflationary pressures and supply chain disruptions across our operating companies.
As Mark stated through broad pricing actions and the team's continued focus on executing on our profitable growth initiatives. We drove approximately 90 basis points of adjusted gross margin expansion and 70 basis points of adjusted core operating margin expansion more than offsetting the headwind of approximately.
$10 million from raw material inflation and logistics.
In the third quarter, we generated adjusted free cash flow of $119 million at conversion of 87%, reflecting some buildup of working capital during the quarter, which remains at very low levels importantly.
Importantly year to date.
Free cash flow conversion is more than 90% and approximately 100% after excluding the incremental federal tax payment paid in the second quarter of this year relating to our 2000 Twenty's spin.
Additionally, our net leverage stands at two nine times adjusted EBITDA up one two turns from the prior quarter, reflecting the completion of the DRP acquisition, which was successfully closed in September.
Looking at the performance of our two platforms.
Mobility technologies core revenue declined 1% as G. B yard declined slightly due to the roll off of <unk> in North America, and the physical regulation in Mexico.
Excluding the impact of U N V. G V. Our core revenue and bookings grew low teens and high single digits respectively.
This highlights the continued demand momentum, especially in retail solutions environmental solutions and further progress in high growth markets in the high growth markets revenue grew low single digits in the third quarter as continued momentum in India, and Middle East and Africa was partially offset by the compare against the prior year Mecca.
Sicko fiscal regulation.
On a year to date basis core growth in our high growth markets is up high teens.
Core revenue growth in our diagnostics and repair technologies platform was 7% driven by high single digit demand at Medco and compares with the third quarter of 2020, which saw a strong recovery from the pandemic impacts macro continues to experience strong demand environment and a growing distribution days.
Reflecting our fifth consecutive quarter of strong net franchise additions.
Additions following the pause during the height of the pandemic.
Diagnostics and repair technologies backlog continues to remain elevated as we worked through supply chain challenges in this robust demand environment.
Looking at total company sales regionally.
As I mentioned high growth markets revenue grew low single digits as a result of the tough Mexico compare and we continue to make progress in strategically important markets, including India, The Middle East and Africa, and Latin America growth in the developed markets in total was up slightly in the third quarter as growth in Western Europe, and then the non.
Many of the portions of our North America business was offset by the impact of E. M. B R. E V. Our North America business.
We also continued to make progress on our profit improvement actions that will better position. The company for the remainder of 2021 and beyond we recognized a restructuring charge of approximately $3 million in the third quarter, we now anticipate.
Dissipate that we will recognize a charge of around $15 million in 2021, a bit lower than we were previously planning as we continually continue to align the pace of actions relative to the strong demand environment. This means the remaining charge of approximately $5 million would be shifted from Q4 to the first quarter of next year and we anticipate that.
We will still achieve our original savings objectives for 2022.
Turning to the outlook assumptions for the full year 2021, we are maintaining our core revenue guide of high single digit growth in our core operating margin expansion target of greater than 125 basis points.
In 2021, reflecting continued execution on our profitable growth initiatives and cost management, and partially offset by persistent inflationary pressures supply chain and logistics constraints and mix that said, we are raising our outlook for adjusted earnings per share to a range of $2.
82, <unk> to $2 86.
Growth of approximately 14% to 16% year over year, reflecting continued momentum and execution in our core business combined with about 4% to <unk> contribution for the in year impact of the <unk>.
The acquisition of Derby.
We anticipate our full year effective tax rate to be around 23%, reflecting some benefit from tax planning initiatives that were implemented in the third quarter.
And on free cash flow conversion, we have seen working capital increase for two consecutive quarters, while still being at historically very low levels. We believe this will put some pressure on our free cash flow conversion and see that being around 90% to 95% for the full year.
This of course includes the additional federal tax payments due we had in Q2 and excluding this our conversion would be around 100% level that we typically expect.
Shifting to the fourth quarter, we expect a core revenue decline of mid single digits. As a result of the M. B compare dynamic while nani of your revenues are expected to still grow low single digits. Despite a tough compare looking.
Looking on a two year stack basis, given the uniqueness of the 2020 compared dynamic non ENB growth is expected to be up high single digits.
Adjusted core operating margin is expected to contract 50 to 75 basis points. This primarily reflects the difficult comps related to the strength of Mapco E.
E M D and Mexico fiscal regulations in the prior year period, consistent with the tale of two house dynamic that we communicated when entering the year as Mark stated this translates into adjusted earnings per share of <unk> 77 to 81.
In the.
Overall, the third quarter demonstrated our ability to execute in a very dynamic environment and as we round out the year. We are on pace with our planned actions to more than offset the earnings impact of him be sunset.
And to direct resources to take advantage of other growth drivers in attractive end markets with that I will turn it back to Mark.
Thanks, Dave.
Before I wrap up I want to remind you of the retail solutions teach in on November 19th.
Aaron and Dan will give you a deep dive into our G D R and D or b retail focused businesses.
It will feature our high quality portfolio of scale with a long runway of attractive expansion opportunities and secular growth driver.
In closing I hope you see what I see exceptional execution, our culture of Bbs at work and important progress on our profitable growth initiatives and portfolio diversification, we're growing into a more focused higher quality industrial technology company. We're excited about the opportunities.
Come with that to build better teams better innovation and a better planet.
We're well positioned to deliver sustainable mobility solutions to the market our track record of transformation strategic Optionality and strong cash generation drives our long term value creation flywheel.
And we're committed to staying laser focused on delivering more profitable growth and compounding returns.
With that I'll turn the call over to Lisa So we can get to your questions.
Thanks, Mark that concludes our formal comments and we are now ready for questions.
At this time, if you'd like to ask a question. Please press star one on your Touchtone phone you may remove yourself from the queue at any time May press. The pound key once again that is star and wanted to ask a question. We will take our first question from Andy Kaplowitz with Citigroup.
Good morning, everyone.
What do you mean.
Mark or Dave could you give us more color on just the puts and takes of your margin performance. Obviously good performance in Q3 with the Incrementals greater than 40%.
That's 30% Decrementals in Q4 isn't overly surprising, but as we think about that Q4 decremental you mentioned a big part of the issue is the tough comparison Parisien V strength in macro but can you update us on how you're thinking about price versus material and logistics costs in Q4, and really into 'twenty. Two if possible I know you'd mentioned price cost positive in <unk>.
Q3, but does that swing to negative in Q4.
Thanks, Andy This is Dave.
As we look into the fourth we anticipate that we will still be price cost positive as we have been year to date, obviously, it's a pretty dynamic environment, we want to see where we exited the year before giving you guys an update or a steer towards 2022, what I can tell you as we look towards the end of the year, we will see where we exit but as we sit here today, we don't anticipate any improvement.
Next year in a meaningful manner, so we're going to position ourselves for that accordingly.
The stained price cost positive is by far the biggest kind of margin action out there and as we worked through the tail of two halves and we see.
<unk> coming off that's obviously pretty good revenue. So there can be a mixed headwind associated with that but I think you've picked up on that.
And I would finally add that from a supply chain standpoint.
The third was was pretty dynamic and we don't see things improving as we get into the fourth in fact, probably a little bit worse and so we've kind of built some of that caution and as well you talked about the incrementals and Decrementals we.
Incremented well in the third that obviously, probably has a little bit to do with the law of small numbers as we saw some uncertainty in the revenue conversion timing, we probably took some actions that have a magnified impact on incrementals, given the lower growth on top and as we look to the to the fourth against the tough compare you know the way I think about it is we're decrementals of 30%, which is a much lower rate.
And we've been permitted through the course of this year.
That's very helpful. David and then you mentioned G D. Our orders, excluding India grew high single digits, which seems relatively good but maybe you could give us little more color into how you're thinking about mobility as even the continues to widen wind down I know you told us last quarter that theres still be a similar headwind in 'twenty two from wind down is 'twenty. One so do you see enough demand.
For instance from healthier developed world customers are faster growing customers in developing countries such as India to promote growth as we go into 'twenty two.
Yeah. Thank you for that question look I feel really good about the initiatives. We're taking that are really driving that ex ANV growth. There I think you're seeing it show up continually and you know what what gives me. Some confidence there is that we have a set of profitable growth initiatives that are really taking hold and they're reading through.
We saw strong growth in environmental retail solutions of course auto repair through macro as well as our spare parts business. So I think the you mentioned the high growth markets. There is a number of initiatives, there and particularly out of India Middle East and Africa that had been really strong. So we've lined up a pretty good slate of initiatives that.
We continue to deliver on and we got a lot of momentum around that you know at the same time. When you go into next year, we had <unk> for a full year. They performed really well in the last two weeks, we had them we've been really impressed with what we see so far so we're excited to add that to our portfolio and I think youre going to see that read through really nicely next year or two.
I appreciate it Mike.
Okay.
We'll go next to Nigel Coe with Wolfe research.
Everybody. This is Brian Lau on for Nigel maybe just wanted to talk about Mapco quick so five strong quarters in a row of franchisee adds backlog remains elevated just could you provide an update on the amount of the geographies still available for franchisee ads and then how are you thinking about.
All of these franchise. He adds are ramping into 2022 professionals are driving some growth.
Thanks, Brian for the question look I understand why you're asking that you know the business is performing really well can be really concise on your answer we've got about 30% of our territories that are open and available to us which is kind of unique to compare to the higher quality peers in that space and we've been building that out and we feel really good about the progress has been made.
And you know the backdrop here is a really strong environment for technicians that continue to buy.
With cash and they're out there investing in their businesses and that's reading through in our product lines. When you look at diagnostics, which is a higher priced item there continuing to actually I would say not continuing it actually stepping up purchases as well as a high dollar control toolbox excuse me and so when you think about that without some raw.
The other thing that bodes well for it is that for this business is that we've got a really strong vitality, which means that every year, we bring about 30% products that are new to market.
And so the key here is to continue that vitality, particularly as we go into next year, which I'm very confident we can because we're providing solutions that technicians want and we'll continue them buying so we're going to take advantage of the strong backdrop, and we're going to keep pushing it forward.
Great and then just a quick follow up with some of the revenue it sounded like pushing to the right do you have any more visibility into <unk> 22 versus what's normally a seasonally weaker quarter sequentially.
Look I think the way we're thinking about 'twenty. Two is is a strong setup I won't give you more color on that in February as we normally do but you know the backdrop. There is is a strong great demand environment as well as these.
Tremendous momentum from these profitable growth initiatives. So I think the setup is good.
Fine.
We'll probably enter 'twenty two with more backlog than we entered 'twenty, one, but again like the fourth quarter, it's going to come down to the supply environment. So we really wanted to see how that develops and that'll go a lot towards our visibility.
Great. Thanks, guys.
Well go next Steve Tusa with Jpmorgan.
Yeah.
Hey, guys.
Good morning.
Thanks, Dave.
Can you maybe just talk about what you see today, if you kind of snap the line, what what kind of price cost would look like for next year.
Well look year to date price cost and we anticipate through the end of the year has been pretty favorable and as you know this is always a big focus area for us I think.
We're gonna have to get a read on the inflationary environment for next year as I said earlier, Steve I think we are a.
We're assuming we're assuming the worst as we make our plans for next year, but we have to see how that develops and that will clearly drive our actions part of the setup for that isn't is a fourth and we're leaning into it but.
But I would also say that there's there's items beyond price cost as we think of the profitability impact from inflation.
Need to we need to work all parts of the P&L. The response to that Mark do you want to add to that yeah. Thanks, Dave.
Steve I think the key is that this environment is not going to change quickly in other words. There's you know a lot of headwinds that are in this and we feel really good the way that we've worked through it so far we have a really strong.
Strong set of initiatives that are paying off I'm happy to get into any detail that you all would like.
But it's pretty clear we've been ahead of this curve off from early on based on those initiatives and as we go into next year. We're counting on this environment to be underway and were rolling out even more initiatives at dig deeper I think that's the nature of this continuous improvement mindset that we have as we continue to Peel. The onion on this great example of that is our simplification.
The efforts that actually reduced the number of skus that we need to chase.
And it enables us to get better alternative sourcing and dig deeper on the components that really matter and so I think that's sort of a new envelope that we're going to be pushing into next year that can even pay off more.
Okay, great. Thanks, Thanks, Steve.
Yeah.
We'll take the next question from Andrew <unk> with Bank of America.
Yeah.
Hi, This is David Ridley Lane on for Andrew.
I'm just wondering in mobility attack a have.
Have you seen any slowdown maybe anecdotally.
Around your customers ability to complete projects, a willingness to start new projects around labor availability and cost inflation.
The supply chain issues.
Wondering if you're sort of.
It's tough for me to do the full the full bridge here in this venue, but I will say that.
I would steer you back to a 30% decrementals and within that.
Actually the top line decline is associated with our ENB product line.
Which is a reasonably high margin items. So there is some mix impact associated with the price costs assumption, we should assume that we continue to offset the margin impact, but I would say that dynamic has continued to tightened as the years progressed. So we pricey the margin upside from price cost tightening up as we as we go I think those are.
Big items.
Alright, Thank you very much.
Our next question comes from Jamie M Mitchell with Barclays.
Hi, Good morning, guys. This is trish climate on for Julian So just back on the supply environment can you guys talk a little bit more about its impact on T. V are relative to die diagnostics and her parents and then maybe if that's changed your expectations for M. B headwinds in 2022 at all.
Yeah, I'm happy to take that question.
When you look at the environment for G D R.
Biggest issue that we got a work through and the risks that we've been predominantly managing has been through some of the specific GTR factory related material availability and as I said in our remarks, I think we've really work to that admirably well I think we're really proud of the.
The efforts that were doing there to pay off you talked about diagnostics and repair of course, we got a factory there for Toolboxes and we've got a lot of supply chain issues, because we source a lot of products there.
But on both accounts, there's been risk no question about that and we could have shipped more as Dave said in his prepared remarks, if we if we can solve that better and so that's clearly a work in progress, but I think when you think about how we think about risks there it's mosley material availability.
Somewhat on labor shortages and supplies I said, but it doesn't rise to the specter of the material available at ability issues and we continue to work toward admirably well. So we're a little bit cautious on the environment, but we're optimistic we can continue to work it.
I think we're going to see how the fourth comes together, where we exit the year, but as of today no update to our <unk> outlook for 2022 that we previously provided which is that the impact to be similar to what we see happy.
Have been in 2021, which is $75 million to $100 million a year over year decline.
Great. Thank you that's very helpful. And then just maybe a follow up can you just remind us how typical pricing works and both of these segment maybe cause like ballpark. What is it you are typically in on my ear kind of moment single digit maybe and then just the cadence from when you announce a price increase typically how long does that take for it to become effective thanks.
Yeah. So we had a number of price increases this year that we're not sort of and schedule is within schedule as say a price increase for the end of the year that sort of sets you up for the beginning of the year.
And we've been pretty good at that I would say on a normal basis. What we started actually last year about this time was some deep analytics on strategic pricing that we could take we did not actually know that the environment for 2021 was going to be as inflation areas. It's been but we got an early start because we recognize there was speech.
Pricing opportunity that came out of our simplification efforts and so that that read through on a number of price increases through the year.
Based on getting and we got an early start accordingly, So I think maybe that gives you a little color on how we think about it and how we're going to continue to prosecute this up what I, what I view as a net opportunity for us in the market.
Perfect. Thanks.
As a reminder, that is star one if you'd like to ask a question. We would take our next question from Andrew who skelley with bird Berg.
Hey, guys Uhm so.
A lot of the blood of the near term price popped up as a kind of taken so I just want to have kind of a more philosophical question. So I think.
R. B I think it was a great deal. It it definitely serves a purpose that helps offset the E M B a headwind.
But I think the the market the multiple.
You know kind of beyond that at that acquisition and I'm wondering you know with them and they still priority what.
Where where do you like investments in some of the kind of longer term growth of your.
You know type deals or or you know acquisition dark vestments, hi, <unk>, how are they prioritize I think going forward.
I know they won't help you financially you know near term, but I wonder if the stock would just be more sensitive to.
Kind of showing something tragic change toward so that they have some growthier areas, albeit longterm.
Well I think it is a great question I do want to touch on Derby, but just give me a minute because I want to answer your question early specifically, we see a range of deals in our pipeline. We're super excited about the cultivation. That's been going on you know I mentioned in my prepared remarks were coming out of our strategic reviews, and I think there's an excellent balance.
Really grozny type deals out there, but we're looking at bolt ons, we're looking at Adjacencies light D. R. B and we're looking at these this growth airspace that would provide early stage technologies that are more strategic over the longer term and I think that balance is something you should expect both hardware and software.
And and we're excited about it I think the space to think about a retail solutions telematics smart cities just to name a few but let me just touch on Dear because I think it's really indicative of kind of also where we're going this is a great asset. This is an end to end technology platform. It combines is deeply embedded point of cell technology.
<unk> in layers on top of it workflow and monitoring software, it's got a great recurring revenue base and it does things like integrated payments and digital marketing solutions and so what's happening is you see a business moving up the technology stock and knows what exactly what kind of things that we also like as well so.
More to come.
Okay, Yeah, <unk> I would agree with that it might just take.
Take some time for the Margaret's are kind of realize that and I think you know if if the stock is still kind of hanging out here in the next year, where where does share buyback.
Where does that fall on your priority list <unk> and if <unk> if if the stock is still kind of boundary do.
Would that move up in your priority list.
Yeah, I think horror focus is always on providing the best opportunity for shareholder return and we continue to think thats through deploying capital on M&A.
Obviously things can change in the future, but that maintains our primary capital allocation priority right now.
Okay. Thank you.
Oh, thank you.
So the next two may sent there.
Yes. Good morning wanted to see if you could you spoke to the growth and environmental this quarter I was curious how you view the runway on environmental here in the fourth quarter.
And into next year, and maybe juxtaposition against how you see that versus the retail solution side of the business.
Okay, I think environmental it's got it dropped to the.
The fundamentals are clearly there is less impacted by AMV of great set of products and solutions that are connected as well as workflow solutions there.
And so we were continuing to push that opportunity outstanding growth that you you've seen and so we.
We've also launched a number of really innovative products to market. This past year, and I think they're helping us really get better traction in that marketplace. So we feel good about where we are and we're going to press every opportunity on that so I I also feel good about that going into next year a lot of momentum.
In in retail solutions.
Perspective as well.
Well the great thing is we get to talk to you on retail solutions on November November 19th So we're pretty bullish on that opportunity.
Excited to showcase that to you a number of really sticky customer serving problems that that not only help us sort of lineup how customers can do better business.
Envious retailing as well as what we are looking at in terms of Carwash. So.
Really happy to talk about that more in depth on November 19th.
Very good we'll sit tight on that and then just as a follow up.
There was the mentioned that you you took backlog down some was that the case in in Mac OS business or was it more than G. B R.
So that was born in G. B R.
We wish we had taken a Dell further we talked about being supply chain constraining, we would have been able to get more revenue.
The door and more backlog off the books for sure. So we're running a very high levels as we talked about almost 40% year over year higher, but Matt Cohen, Jvr, where we saw the primary challenges and getting backlog down and probably a little more jvr in the metro.
Okay very good thank you.
Our next question comes with Julia Mitchell Barclays.
Hey, this is Tristan again I'm just a follow up for me you mentioned backlog here for Ya and you mentioned orders crowed kind of X T V are being I've been single digits.
What were the total company orders growth in the corner and I don't know if you have that by <unk> versus T V R or if you'll just go to that.
Yep.
On an orders basis on a year over year basis, we were down kind of that mid single digits total up and it's really the dynamic and hitting into that tale of two halves that we talked about here. So.
Sequentially, we tend to see orders come down a little bit, but it's really the impact of <unk> on a year over year basis that.
Here in the third so.
Continued robust demand environment and didn't really most most all things <unk>, where we see the end of the dynamics kicking up.
And just maybe hung up on that with the M. B dynamic can you just talk about kind of Martin's by <unk> techniques I would think we'd see a little bit of a different American those dynamics.
Yeah, we don't we don't get too granular on the margin impacts here, but.
He is clearly a boat fleet average margin for.
I would say for volunteer all up and definitely for G. B R as well.
And so as we work through that that's a lot of the profitable growth initiatives that we see but also medical helped a lot because Mac. Those are really strong march of business for us that we.
Do we get some benefit from.
Okay. Thank you sure.
There are no further questions at this time I would tend to program back over to Mark.
Yeah. Thank you I'm Gonna look I'm going to take this opportunity to thank the supply chain team for their outstanding work and for the entire a bond tier team for embracing our core values for more than a year now and particularly the German away and core value because I believe that's been important establishing volunteer as a <unk>.
Company that achieves results. Thanks for joining us on today's call and have a good day.
This does conclude today's program. Thank you for your participation you may disconnect at any time.
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