Q1 2022 Interfor Corp Earnings Call
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Interfor's quarterly analyst call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone.
Ladies and gentlemen, thank you for standing by and welcome to Inter Forest quarterly analyst call. At this time all participants lines are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Operator: Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, Mr. Ian Fillinger. Thank you. Please go ahead.
Ian M. Fillinger: Thank you RJ. Welcome to our Q1 2022 analyst call. With me today, you have Rick Pozzebon, our Senior Vice President and Chief Financial Officer, and Bart Bender, our Senior Vice President of Sales and Marketing.
With me today, you have Rick Pas Bahner, senior Vice President and Chief Financial Officer, and Bart Bender, our senior Vice President of sales and marketing.
Ian M. Fillinger: Our agenda today will start off with myself, providing a recap of our financial results, our strategic focus, and our improvement efforts. I'll then pass the call to Rick who will cover our financial matters, and then Rick will pass the call to Bart who will cover our markets.
Ian M. Fillinger: Turning to our financial results, our Q1, adjusted EBITDA was 570 million, approximately four times higher than Q4. All lumber benchmark prices increased significantly throughout most of the quarter before peaking in mid-March. We are executing on our strategic plan and we're generating industry-leading lumber margins and returns on capital. I encourage you to look through our investor deck on our website at these metrics.
All lumber benchmark prices increased significantly throughout most of the quarter before peaking in mid March.
We are executing on our strategic plan and we're generating industry, leading lumber margins and returns on capital.
Courage, you to look through our investor deck on our website at these metrics.
Ian M. Fillinger: Our improvement efforts were again balanced across the company as we made progress in all regions. Production volumes were again, an all-time high quarterly record, which included the addition of our eastern Canadian region and the ramp-up of our de Quincey, Louisiana Mill, and strong operational performance across most of our other operations.
Production volumes were again, an all time high quarterly record, which included the addition of our eastern Canadian region.
And the ramp up of our de Quincey, Louisiana Mill in.
And strong operational performance across most of our other operations.
Our total unit production cost increased slightly due to higher log costs in the US and conversion costs in all regions driven largely by the ongoing inflationary pressures.
We continued on our Capex improvement plans in every region spending $51 million in the quarter, down slightly from the previous quarter, but on track and on target for the $275 million for the full year of which approximately 200 will be on discretionary high payback projects.
Turning to our financial capacity, we continue to have significant financial capacity to consider several further capital deployments, which Rick will cover off shortly.
I'd also like to provide an update on the early integration of our eastern Canadian platform.
You'll recall, the acquisition of [inaudible] was completed on February 22nd, and since then we've been onboarding and have had several welcome events with our new teammates to Interfor.
<unk> completed on February 22nd.
And since then we've been Onboarding and have had several welcome events with our new teammates 10 or four.
Our key focus areas in the near term are to enhance the historical performance, operation performance, identify further opportunities for easy improvements and synergy realization, planning for back office, corporate and system integrations, and assessing for potential long-term strategic investment.
Yes.
Since the acquisition of our eastern team, we performed well and in many areas we've had productivity at best-ever performances. In fact, at five of seven mills in the last eight weeks.
While it's still early and more work to do, we have already realized almost half of our $25 million synergy target within the first eight weeks. And we expect more operational synergies to be tracked and tackled over the next coming months.
And we expect more operational synergies to be tracked and tackled over the next coming months.
Turning to our strategic focus, we continue to push forward on achieving greater returns on capital through our unrelenting focus on operational excellence and capital deployment. As such, I want to outline a few key initiatives Our de Quincey Mill in Louisiana continues to progress well and we now have moved to a two-shift operation several months ahead of schedule. In Georgia, our largest capital project at our Eatonton Mill continues on track and will be fully completed in the next month. We expect the new standard to be set for our US South operations in terms of volume, conversion costs, and earnings.
a two-shift operation several months ahead of schedule. In Georgia, our largest capital project at our Eatonton Mill continues on track and will be fully completed in the next month. We expect the new standard to be set for our US South operations in terms of volume, conversion costs, and earnings.
In BC, we are nearing completion on the sale of our Acorn Mill to the sand group and in Eastern Canada, we recently announced our purchase of 16% of Green first shares from Ram.
And in Eastern Canada, We recently announced our purchase of 16% of Green first shares from Ram.
In summary, our capital returns are again exceptional for Q1 generating a year to date, 87% return on capital. We continue to work hard on our capital allocation discipline to ensure the best returns for our shareholders and we continue to see strong performances from our internal projects and recent acquisitions.
We continue to work hard on our capital allocation discipline to ensure the best returns for our shareholders and we continue to see strong performances from our internal projects and recent acquisitions.
That concludes my opening remarks, and I'll now pass the call over to Rick.
Pass the call over to Rick.
Richard Pozzebon: Thank you Ian, and good morning.
First off, I'll refer you to cautionary language regarding forward-looking information in our Q1 MDNA.
The first quarter saw Interfor continue its rapid transformation into one of the largest and most profitable lumber producers in the world. We added nearly 1 billion board feet of annual lumber capacity upon closing the E Com acquisition and further diversified into a new region with attractive fiber fundamentals.
Closing on E. Com capped an 11-month span in which we grew our total lumber capacity by over 60%. This rapid growth drove our lumber production and shipments in Q1 to record levels. The exciting part is that the most positive impacts of our growth are just now starting to be reflected in our results.
This rapid growth drove our lumber production and shipments in Q1 to record levels.
The exciting part is that the most positive impacts of our growth are just now starting to be reflected in our results.
Growth through acquisition has been just one facet of our disciplined and balanced approach to capital allocation in the quarter. We continued to make great progress on our multi year strategic capital program. We saw significant value in buying back our own shares and completed our 10% normal course issuer bid program shortly after quarter end, and we further rationalized our portfolio with the sale of the Acorn Specialty Mill.
We continued to make great progress on our multi year strategic capital program, we saw significant value in buying back our own shares and completed our 10% normal course issuer bid program. Shortly after quarter end and we further rationalized our portfolio with the sale of the Acorn specialty mill.
Collectively, these actions have positioned our balance sheet with conservative leverage and further optimized our portfolio to continue generating best-in-class returns on capital.
In terms of first quarter financial results, Interfor generated adjusted EBITDA of $570 million. Included in this figure is $68 million of non-recurring purchase accounting expense driven by having to record the acquired E Com inventories at fair value.
Adjusting for this, EBITDA would have been a quarterly record of $638 million. We expect a further $17 million of similar fair value adjustments to impact our second quarter results as we sell through the remaining acquired inventory.
We expect a further $17 million of similar fair value adjustments to impact our second quarter results as we sell through the remaining acquired inventory.
First quarter earnings benefited from the strong operating performance and elevated lumber prices. While we continue to face inflationary pressures on the cost side and the challenging logistics environment.
While we continue to face inflationary pressures on the cost side and the challenging logistics environment.
In terms of cash flow, we generated $379 million from operations. Of this, $98 million was invested in working capital with seasonal inventory builds and increased receivables driven by lumber prices. Working capital reductions are anticipated in the second quarter.
We also invested $51 million in capital projects and returned $194 million to shareholders through share buybacks at an attractive average price.
We ended the quarter with our balance sheet in a conservative leverage position and ample liquidity to continue advancing on our strategic plans. These plans include spending about $275 million on capital improvements for the full year 2022, which is similar to prior guidance.
These plans include spending about $275 million on capital improvements for the full year 2022, which is similar to prior guidance.
We continued to see significant opportunity to enhance our returns through capital reinvestment. At the same time, we will continue looking for attractive opportunities to deploy capital on lumber-focused growth and to return additional capital to shareholders.
At the same time, we will continue looking for attractive opportunities to deploy capital on lumber focused growth and to return additional capital to shareholders.
To wrap up, Q1 was a transformational and record-setting quarter for Interfor and we are well-positioned financially and operationally to continue our momentum in growing value for our shareholders. That concludes my remarks, I'll now turn the call over to Bart.
And we are well positioned financially.
And operationally to continue our momentum in growing value for our shareholders.
That concludes my remarks, I'll now turn the call over to Bart.
J. Barton Bender: Thank you, Rick. Good morning, everyone. I'll provide a few comments on our lumber markets. First off, we're very pleased to welcome the eastern Canadian operations to the Interfor team. With that comes virtually 1 billion [inaudible] of pure SPF production in east, both dimension and [inaudible]. In addition, we now have a regional office in Montreal servicing our customers.
That conversion.
That comes virtually 1 billion sheet pure SPF production in east, both I mentioned <unk> and.
In addition, we now have a regional office in Montreal servicing our customers.
Further, we increased our product offerings to include high Joyce and Remanufacturing lumber. We're excited about this diversification, the strategic customer base, and the group of professionals we now get to work alongside in Eastern Canada.
Now to the markets, the fundamentals remain consistent quarter over quarter, however, not without some areas of uncertainty.
Specifically, tailwinds remains strong when it comes to household balance sheets, demographics, rising home equity, and agent housing stock, all encouraging when considering the demand for lumber in North America.
Age of housing stock all encouraging when considering the man for La Mer in North America.
In terms of uncertainty, inflation, interest rates, and ultimately affordability come into question. New home construction seems to have such a degree of pent-up demand and growth in this area still feels very strong. Repair and remodel which is perhaps a bit more sensitive has shown a level of volatility as we work through Q1 into Q2.
Inflation interest rates and ultimately affordable affordability come into question New home construction seems to have such a degree of pent up demand.
And this area still feels very strong repair and remodel which is perhaps a bit more sensitive as shown a level of volatility as we work through Q1 into Q2.
Lastly, the Russia and Ukraine war will bring shifts to supply lines globally. We expect voids left in Europe and Asia from the cessation of Russian softwood lumber imports to draw from European imports to North America, and also add to exports from North America to some parts of Asia.
Specifically speaking about the repair and remodel end-use sector, we started Q1 off very strong both from an inventory and consumption perspective. In the latter part of the quarter, we are started to see consumption temper, however so far in Q2, consumption has started to increase.
So far in Q2 consumption has started to increase.
It's important to point out that the inventory position at the box stores this year is very different from the circumstances one year ago. From our perspective, the inventories are well managed.
The new home construction end-use sector continues to show encouraging demand, starts at close to $1.8 million, it's encouraging but far outpacing the completions which are running at 1.3.
We see this situation positively as we expect supply chain issues to subside in all products, which should increase the rate of completions, which translates to more demand for lumber in this sector.
Supply chain is a word we are using considerably more of these days and remains an interesting dynamic in our business. We are expecting constraints to continue in all modes right through Q2 into Q3, and quite possibly Q4. At Interfor, our operations are well diversified not only geographically, but also in terms of transportation modes and carriers.
We are expecting constraints to continue in all modes right through Q2 into Q3.
Quite possibly Q4.
And therefore, our operations are well diversified not only geographically, but also in terms of transportation modes and carriers.
Overall, our markets for Q2 remain resilient and we are encouraged in what we see for the balance of the year. With that Ian, I'll turn it back over to you. Thanks.
With that ill turn it back over to you.
Ian M. Fillinger: Okay, thanks Bart. Operator, we're ready to take questions from the analysts now.
Operator, we're ready to take questions from the analysts now.
Operator: Thank you. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. Again, that is star, then the number one. To withdraw your question, please press the pound or hash key. Please standby while we compile the Q&A roster. Your first question comes from the line of Sean Stewart with TD Securities. Your line is open.
Your first question comes from the line of Sean Stewart with <unk>.
T D Securities Your line is open.
Sean Stewart: Thanks, good morning everyone. A couple of questions. Ian, I want to start with the Green first investment. Can you give us some of the context behind the motivation there? Is it fiber security potential for the saw mills, synergies, maybe all of the above but any any context on the motivation and appetite for consolidation on that front and further to that is more M&A potentially temper your appetite for further returns of capital to shareholders?
Thanks, Good morning, everyone. A couple of questions. Start with the Green first investment. Can you give us some of the context behind the motivation there is it fiber security potential for the saw mills synergies, maybe all of the above but any any context on the motivation and Apple. Appetite for consolidation on that front and further to that to that is. More M&A potentially temper your appetite for further returns of capital to shareholders.
A couple of questions. Start with the Green first investment. Can you give us some of the context behind the motivation there is it fiber security potential for the saw mills synergies, maybe all of the above but any any context on the motivation and Apple. Appetite for consolidation on that front and further to that to that is. More M&A potentially temper your appetite for further returns of capital to shareholders.
Start with the Green first investment. Can you give us some of the context behind the motivation there is it fiber security potential for the saw mills synergies, maybe all of the above but any any context on the motivation and Apple. Appetite for consolidation on that front and further to that to that is. More M&A potentially temper your appetite for further returns of capital to shareholders.
Can you give us some of the context behind the motivation there is it fiber security potential for the saw mills synergies, maybe all of the above but any any context on the motivation and Apple. Appetite for consolidation on that front and further to that to that is. More M&A potentially temper your appetite for further returns of capital to shareholders.
Appetite for consolidation on that front and further to that to that is. More M&A potentially temper your appetite for further returns of capital to shareholders.
More M&A potentially temper your appetite for further returns of capital to shareholders.
Ian M. Fillinger: Yeah, for sure Sean. I would kind of just refer to the press release that we put out. It was an investment opportunity that we saw and that's really about it. There was a seller and we were a buyer. It was done last Monday and there's not much more to comment on that Sean. We're concentrating on what we're doing at Interfor when it comes to sales and marketing and operations, capital investment, but we just saw that as a good opportunity to make that investment, and we saw Green First as an attractive opportunity for the company to pick up those shares.
You know I would kind of just refer to the press release that we put out it was an investment opportunity that we saw.
And that's really about it.
A seller and we were a buyer.
It was done last Monday and.
<unk>.
Not much more to comment on that Sean.
We're we're concentrating on what we're doing at inner for when it comes to sales and marketing and operations.
Capital investment, but.
You saw that as a good opportunity to make that investment in.
And we saw green versus as attractive. Our opportunity for the company to pick up those shares.
Our opportunity for the company to pick up those shares.
Multiple speakers: Rick [inaudible]. Okay, understood.
Richard Pozzebon: No, I think that covers it Ian.
Sean Stewart: Okay. A question for Ian or Bart. Any sense that transportation headwinds are starting to ease and more to the point, I'm looking for some guidance on the inventory that you've built up over the last couple of quarters about 100 million board fee increase to your finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level?
Question for Ian or Bart. Any sense that transportation headwinds are starting to ease and. More to the point. I'm looking for some guidance on the inventory that you've built up over the last couple of quarters about 100 million board feet increase to your you. Finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level.
Any sense that transportation headwinds are starting to ease and. More to the point. I'm looking for some guidance on the inventory that you've built up over the last couple of quarters about 100 million board feet increase to your you. Finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level.
More to the point. I'm looking for some guidance on the inventory that you've built up over the last couple of quarters about 100 million board feet increase to your you. Finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level.
I'm looking for some guidance on the inventory that you've built up over the last couple of quarters about 100 million board feet increase to your you. Finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level.
Finished goods inventory. How long do you expect it'll take to work through that surplus at the mill level.
How long do you expect it'll take to work through that surplus at the mill level.
Okay, Sean it's Bart here I'll tackle that question.
J. Barton Bender: First off, I think our inventory build in excess of the shortfall in production versus shipments was $61 million. I think the 100 you're referring to is perhaps some of the eastern operations from normal course volumes. So we'll have to get used to carrying a bit more inventory than we usually do from that perspective.
And X.
And access the shortfall in production versus shipments was $61 million I think 100, youre, referring to is as perhaps shell.
Some of the eastern operations normal course volumes, so we'll have to get used to carrying a bit more inventory than.
And then we usually do from there.
That perspective.
I would say pre-COVID-19 days, we would've been in that 18 days of production, that would be our normal range. And I'd say post the E Com acquisition, that's probably bumped up to more like 20 days that we would normally carry in inventory, and today, we're at roughly 23.
We would've been in that 18 days of production that would be our normal range and I'd say post.
The E Comm acquisition, that's probably bumped up to more like 20 days.
That we would normally carry in inventory and today, we're at roughly 23.
So we actually feel pretty good about where we're at with inventories, and we will continue to work hard at keeping those well managed as we go forward.
And we will consider we will continue to work hard and keeping those well managed.
As we go forward when it comes to transportation capacity.
When it comes to transportation capacity, I think it's been one of those volatile sort of files for everyone quite frankly, and I think some months are good and some months aren't. It depends on what mode and what region. So we still think we're dealing with quite a bit of congestion and disruption from that standpoint, and we expect that to continue through the balance of Q2. And we have been given some ideas that we'll see improvements in Q3 and further improvements in Q4. So I think this situation on the logistics side isn't going to fix itself overnight. I don't believe it's going to fix itself within Q2, it'll take a bit longer but when it comes to Interfor, we feel very comfortable with where we're at from an inventory perspective, and we'll continue to manage those accordingly.
For every one quite frankly, and I think some months are good and some months it depends on what mode and what region.
So we still think we're dealing with quite a bit.
Of congestion and disruption from that standpoint, and we expect that to continue through the balance of Q2.
And we haven't been given some some ideas that we'll see improvements in Q3 and further improvements in Q4, So I think.
This situation.
With.
On the logistics side isn't going to fix itself overnight I don't believe it's going to fix itself within Q2, it'll take take a bit longer but when it comes to and therefore.
We feel very comfortable with where we're at from an inventory perspective, and we'll continue to manage those accordingly.
Sean Stewart: Okay. Thanks for that part. That's all I have for now, thanks, everyone.
J. Barton Bender: Thanks, Sean.
Operator: Your next question comes from the line of Hamir Patel with CIBC Capital Markets. Your line is open.
Hamir Patel: Hey, good morning. Bart, I was wondering if you could give us a sense as to what you're seeing in some of the other end-markets like R&R and industrial?
Bart I was wondering if you could give us a sense as to what you're seeing in some of the the.
The other end markets like R&R and industrial.
J. Barton Bender: Well, Repair and remodel, I think I commented a little bit about that in our opening comments. Repair and remodel started off the quarter very, very strong quite frankly. It was decent momentum and it wasn't until partway through that we saw some pause. But really when I talked about the inventory position this year versus say last year, and it wasn't in a position to really manage that shift in demand and I would have to say that the shift wasn't that dramatic, and since then we've seen things pick back up. So repair and remodel as we go into Q2 seems fairly stable, I think is the best way I would put that. I think most importantly, the inventories that have been allocated to that end-use segment are well managed and I think that's the difference this year versus what we saw last year.
Sure.
On our opening comments.
Repair and remodel started off the quarter very very strong quite frankly.
Jobs.
Decent momentum it wasn't until partway through that we saw.
Some pause, but really when.
When I talked about the inventory position.
This year versus say last year.
And it wasn't in a position to really manage that that shift in demand and I would have to say that the shift wasn't that dramatic.
And since then we've seen things pick back up so repair remodel as we go into Q2.
Seems fairly stable I think is the best way I would put that in I think most importantly, the inventories that have been allocated to that end use.
<unk>.
Our well managed and I think thats the difference this year versus.
What we saw last year.
From an industrial standpoint, our customers are very active. That's kind of an end-use sector that's quite stable and has been stable. So we're not seeing anything that would give us any different opinion on that. So overall, both of those items are in a good spot.
Our customers.
Our very active.
We have had that's kind of an end use sector, that's quite stable and has been stable.
So we're.
We're not seeing anything that would.
Give us any different opinion on that.
So overall both of those items in a good spot.
Hamir Patel: Okay, great. Thanks, that's helpful. And Ian, I wanted to get your sense as to Ontario and Quebec, obviously, newer regions for you. How do you see log costs there evolving over the next year or two?
Yeah.
I wanted to get your sense as to you know them.
Terry on Quebec, obviously, a newer region for you how do you see log costs.
There are evolving over.
The next year or two.
Ian M. Fillinger: Yes, hi Hamir, I mean, we are very positive on the log cost dynamics in Ontario and Quebec, especially when you compare to British Columbia, there's definitely an advantage that the eastern Canadian region has. And so we feel very good about it Hamir and we've got good log costs and lower log costs in the south. Obviously, some creep up there depending upon where the mill might be located but we're very pleased with that and the bolt-on for our eastern Canadian new region as well. We have a very favorable outlook on the log cost.
We are very positive.
On the log cost dynamics in Ontario, and Quebec.
Especially when when you compare to British Columbia.
There's definitely an advantage.
The eastern.
Canadian.
No region has and.
So we feel very good about it here and.
We've got.
Good log costs and lower log costs in the south.
Obviously, some creep up there depending upon where the mill might be located but we're very pleased with that and in.
The bolt on for our eastern Canadian.
New region as well.
We have a very favorable outlook on the log cost.
Hamir Patel: Great. Thanks, that's helpful. I'll get back in queue.
Ian M. Fillinger: Thank you.
Operator: As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Again that this is star then the number one. Your next question comes from the line of Paul Quinn with RBC capital markets. Your line is open.
RBC capital markets. Your line is open.
Multiple speakers: Thanks very much. Good morning, guys. Hey, Paul. Good morning.
Hey, Paul Good morning.
Paul C. Quinn: Just if you could outline E com's Q1 contribution. what do they generate to EBITDA in Q1?
Q1 contribution what do they generate EBITDA in Q1.
Well, we are we completed on February 22nd so not a lot of track history there but.
Ian M. Fillinger: Well, we completed it on February 22nd so not a lot of track history there, but Rick, maybe you can kind of give it context around that.
Richard Pozzebon: For sure. So we disclosed they produced around a 100 million board feet and sold through just slightly less than that. And we commented on the purchase accounting adjustments. So if you back out that purchase accounting adjustment it would be north of $70 million of EBITDA for the six weeks of ownership.
And we commented on the purchase accounting adjustments. So if you back out that purchase accounting adjustment would be north of $70 million of EBITDA.
For the six weeks of ownership.
Paul C. Quinn: Pretty impressive. Maybe you can just remind me where are the residuals of E Com going to?
Maybe you can just remind me where.
The residuals the vehicle I'm going to.
Richard Pozzebon: Yeah, various takers in the region, well capitalized facilities. Paul, we've got no real concerns around the residual offtake from the operations.
Yeah various. Takers in the region well capitalized facilities, Paul we've got no real concerns around the residual offtake.
Takers in the region well capitalized facilities, Paul we've got no real concerns around the residual offtake.
From the operations.
Paul C. Quinn: Okay. So you think residuals are a concern back in the east for other companies though?
Okay. No. Do you think do you think residuals is concerned back east for other companies though.
No. Do you think do you think residuals is concerned back east for other companies though.
Do you think do you think residuals is concerned back east for other companies though.
Ian M. Fillinger: No, we don't think so Paul. I mean, the takeaway as Rick alluded to is strong, we have arrangements and agreements, and contracts in place that are multi-year and strong customers that are taking away the residual so we're feeling good about that.
Multi year and.
Strong customers that are taken away the residual so.
We're feeling good about that.
Paul C. Quinn: Okay, and then just on the cost side, you've got a couple of mills started up in Q2, do you expect your cost to move up early as a result?
Got a couple of mill started up in Q2 do you expect your cost to move up.
It's early as a result.
Ian M. Fillinger: With the startup of like de Quincey go into two shifts in Eatonton?
Paul C. Quinn: Yeah, plus more contribution from E com.
Ian M. Fillinger: Yeah, we think our costs will be reduced on a unit basis with that added production coming in and helping the individual mills, but also spread out across the company, we should see cost reductions going forward.
Be reduced on a on a unit basis with that added production coming in and being well, helping the individual mills, but also spread out across the company, we should see cost reductions going forward.
Paul C. Quinn: Okay, that's all I had, great quarter. Thanks.
That's all I had a great quarter. Thanks.
Ian M. Fillinger: Thanks, Paul.
Operator: And there are no further questions over the phone line at this time. I would now like to turn the call back to Ian.
Ian M. Fillinger: Okay, great. Thank you operator. Just concluding remarks in closing, we are focused on maintaining the health and safety and wellbeing of our employees. We continue to drive cost reductions across the company and we're matching our production rates to our order files and we're continuing with a balanced approach to capital allocation. I would like to thank everybody for dialing in and participating in our update call this morning and your interest in our company. If you have any further questions feel free to reach out to myself, Rick, or Bart at any time. Thank you, operator.
We continue to drive cost reductions across the company and we're matching our production rates to our order files and we're continuing with a balanced approach to capital allocation. I would like to thank everybody for dialing in and participating in our update call this morning and your interest in our company. If you have any further questions feel free to reach out to myself, Rick, or Bart at any time. Thank you, operator.
At any time, thank you operator.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.
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