Q2 2022 Orion Group Holdings Inc Earnings Call
Good day and welcome to today's second quarter 2022 Orion Group Holdings, Inc. Earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
As a reminder, today's call is being recorded I would now like to turn today's call over to Fran Okoniewski Vice President Investor Relations. Please go ahead Sir.
Thank you Lisa and good morning, everyone and welcome to Orion Group Holdings second quarter 2022 earnings conference call and webcast join.
Joining me today are Austin Shan filter Orion group Holdings' interim.
Oh, Hey, Craig Owen currently serving in the capacity of Chief Financial Officer advisor.
Regarding the format of the call we've allocated about 10 minutes for prepared remarks in which Austin and Craig will highlight our results and update our outlook.
We will then open the call for questions.
During the course of this conference call, we will make projections and other forward looking statements regarding among other things our end markets.
Revenues gross profits gross margin.
EBITDA EBITDA margin.
Backlog projects.
And negotiation and pending awards as.
As well as our estimates and assumptions regarding our future growth.
Ministry of expenses.
Capital expenditures.
These statements are predictions that are subject to risks and uncertainty, including those described in our 10-K that may cause actual results to differ materially from those statements.
Moreover, past performance is not necessarily an indicator of future results.
By providing this information we undertake no obligation to update or revise any projections or forward looking statements.
Whether as a result of new developments or otherwise.
So please note that adjusted net income adjusted earnings per share EBITDA and EBITDA margin are non-GAAP financial measures under the rules of the Securities and Exchange Commission, including regulation G.
Please refer to reconciliations and definitions inclusive of the most comparable GAAP measures and reconciliation tables accompanying this earnings conference call within the press release issued last evening.
The press release can be found on our website at Www Orion Group Holdings, Inc. Dot com.
Also for additional discussion of risk factors that could cause actual results to differ materially from our current expectations. Please refer to our quarterly and annual filings with the SEC, which are also available in the investors section of our website.
And with that I would like to turn the call over to Austin Shan filter interim CEO .
Austin, Yes.
Good morning, and thank you Fran.
First I'd like to thank the entire team for embracing the changes and the new expectations that have been set in the past 60 days.
I appreciate the actions that are underway and that needed to be provide a clear successful path forward.
As we work to conclude the Onboarding of new leadership team. The steps, we're taking now will enhance and set up the foundation for the success of that new team.
These steps include <unk>.
Company wide focus on obtaining margins margin improvement on all projects.
Ensuring the ability to capture all cost escalations.
Continuously downsizing unproductive markets.
Monetizing real estate.
Improving liquidity.
Increasing project wins from negotiation processes, not just low bid.
And once again key is onboarding, a new management team.
Just one example of the efforts that we put forward.
June we will post our first profit.
We posted our first profit in concrete for the year.
Our backlog remains solid and we continue to see clear opportunities in our end markets.
Which will be further enhanced as the full impact of the infrastructure comes online.
In addition to improving our liquidity.
By our performance. We also are focused on our dsos.
Please note that just one day improvement.
Over $2 $5 million of liquidity.
With regards to real estate, we have two pending transactions.
On our port Lavazza properties.
We believe these will close.
The second half of this year.
We are fully engaged with CBRE and developing a desk disposition strategy on the remaining properties.
I'll go into that more later in the Q&A.
All proceeds from the pending transactions, we will go to the reduction of our revolver, which will add to our liquidity.
Last but not definitely not definitely not least we.
We are in a way to selecting our next CEO .
We expect this process.
To be in the hiring to be completed in August .
The CFO search is well underway and has been very positive as well our current scheduled to have this selection made.
Most most likely towards the end of August .
I look forward to our Q&A sessions I'd now like to turn the call over to Craig.
Thank you Austin and thanks, everyone for joining us I will now discuss the financial results for the second quarter in more detail <unk>.
Revenues for the quarter were $195 million up as compared to $146 million in the second quarter 2021, and $175 million in the first quarter.
The increase was primarily due to higher volume in the concrete business and the startup of large jobs that were awarded in the second half of 'twenty, one and the marine business.
Second quarter gross profit was $14 3 million compared to $12 3 million in the prior year period. The increase was primarily driven by efficiencies in equipment and labor utilization and a change in mix of work in the Marine segment in the current period, partially offset by Unabsorbed indirect expenses in the concrete segment.
Second quarter gross profit was up 12% as compared to the first quarter gross profit of $12 8 million and year to date gross profit of $27 2 million was up over 100% compared to the second half of 'twenty one.
As a percentage of revenues gross profit margin was seven 4% in the second quarter down from eight 4% in the prior year period and up slightly from the first quarter.
Turning to the segments in the second quarter. The Marine segment had revenues of $82 3 million and adjusted EBITDA of $8 7 million equating to an adjusted EBITDA margin of 10, 6%.
This compares to $63 9 million of revenue adjusted EBITDA of $7 8 million and an adjusted EBITDA margin of 12, 2% in the prior year period.
Mercury Marine results were down slightly on revenues and up on adjusted EBITDA and adjusted EBIT margin compared to the first quarter of 'twenty. Two that had revenues of $84 5 million adjusted EBITDA of $7 3 million and an adjusted EBITDA margin of eight 6%.
The increase in adjusted EBITDA compared to the second quarter 'twenty, one was driven primarily by its startup of large jobs awarded in the second half of 'twenty one.
The concrete segment had second quarter revenues of 100.
$12 3 million.
Adjusted EBITDA of a negative $3 million and adjusted EBITDA margin of a negative two 7%.
This compares to 80 to $81 9 million of revenue adjusted EBITDA.
400000, and adjusted EBITDA margin of negative <unk>, 5% in the second quarter of 'twenty one.
Concrete results were up compared to the first quarter 2022 that had revenues of $90 5 million adjusted EBITDA of negative two point or.
And adjusted EBITDA margin of a negative two 3%.
The concrete segment's second quarter results as compared to the second quarter 'twenty. One were impacted by decreased project performance due to inefficiencies and executing work, partially offset by higher volume.
SG&A expenses for the first quarter.
Excuse me second quarter were $17 2 million or eight 9% of revenues compared to $13 7 million.
Nine 3% of revenues in the prior year period.
The increase in SG&A compared to the prior year was primarily due to severance.
<unk> fees related to management transition property tax true ups in the current year period.
As a result of the true up reducing bonus expense in the prior year period.
Net loss for the second quarter was $3 1 million or <unk> <unk> diluted loss per share.
Adjusted for nonrecurring items and the tax impact from valuation allowances adjusted net loss was <unk> 9 million or <unk> <unk> loss per share.
Second quarter, adjusted EBITDA was $5 7 million.
Renting it just an EBITA margin of two 9%.
This compares to adjusted EBITDA of $7 4 million.
And an adjusted EBITDA margin of five 1% in the prior year period.
And adjusted EBITDA of $5 2 million and adjusted EBITDA margin of 3% in the first quarter.
Turning to bidding metrics in the second quarter. The company bid on approximately $1 8 billion worth of opportunities and was successful on $194 million.
This resulted in a win rate of 10, 8% and a book to Bill ratio of 1.0 times for the quarter.
As of June 30, 'twenty, two backlog was $603 million up from $394 million at the end of the prior year period.
Quarter end backlog $281 million was in the Marine segment and 322 million was in the concrete segment.
Approximate approximately 81% or $487 million in the quarter ending backlog will burn during the next 12 months with the remainder associated with longer term projects burning throughout 'twenty, three and enter 2024.
Additionally, the company is the apparent successful bidder or has been awarded a $153 million of new work subsequent to the end of the second quarter.
Of this approximately $149 million is related to the marine segment, while 4 million is related to the concrete segment.
The company ended the quarter with $33 million of outstanding debt.
$31 9 million of which was related to the revolver.
As of June 32022, the company had approximately $8 1 million of cash and $8 4 million of availability under its revolving credit facility.
The company is in compliance with its credit agreement covenants.
With that I'll turn the call back to Lisa for Q&A.
Okay.
Thank you if you would like to ask a question on the phone lines. Today. Please press star one on your telephone keypad again, everyone that is star one to ask a question.
We'll pause for a moment.
We will take our first question from Julio Romero with Sidoti <unk> Company.
Hey, good morning, Thanks, very much for taking my questions.
Good morning, So I wanted to start off on the Marine side. If you could just maybe speak on the the successful bids of 149 million Marine seems pretty sizable and if you could just touch on maybe the margin profile and if those are awards are public or private.
They are a little bit of a mix of both the public and private.
Margins on those I think.
I can tell you it would range from 10% to about a 12, 5% margin on the projects there was a lot of.
Detailed discussion.
What is notable as much of that was negotiated work not low bid.
Got it understood and I guess.
If we could just talk about concrete a little bit just talk about why.
Profitability kind of trended down sequentially in <unk> and maybe what you expect for profitability in a concrete in the back half of the year.
While we were finished.
When I got in here, we went over and we changed a lot of I talked a lot about changing our margin approach in that business.
We've instituted a lot of new.
Minimum margins that will do bids out and take on new work, we have to burn off existing work and last quarter and we're seeing the impact of bringing that work off.
One of the big examples that I can give you is we've reduced the backlog in central Texas by over $9 million and the.
Second quarter.
Going forward, we've reduced the jobs.
By 15 projects total track, we only have 19 projects left.
And the market.
This is a market has given us a lot of challenges.
You can make margin at all and.
We've had a lot of losses there.
Subject, where I talk about downsizing unproductive markets.
That's still came into our numbers in the second quarter.
Reducing this by $9 million and dropping the project numbers, we expect to see margin improvements in concrete throughout the third and fourth quarter.
Okay very good and maybe last one for me is just.
If you could broadly maybe speak on demand trends in your private markets, both marine and concrete and.
Are you currently seeing any signs of rates maybe.
Moving to any demand change.
Changes at all.
Well, what's interesting first of all the rates.
We've gone ahead and changed a lot of our margin profile on our bidding across both divisions, both marine and concrete and in doing so we've been successful in winning what I would call better work better quality work with great customers.
At a higher level. So we're not seeing margin compression at this point matter of fact.
I would see it a little bit of the opposite we're testing those markets a little bit more secondly, we're working really hard to make sure that we're building in.
Contingency language in all of our contracts to handle any unforeseen.
Escalation type of clause costs that we're experiencing through this time.
Most of our customers if not all have been working with us very closely on that issue that we haven't had a lot of pushback.
The fact, we're still seeing strong markets in both Houston and Dallas were.
We're not seeing any denigration of the opportunities that we have.
We're being more picky, so we're going to probably see a little bit of reduction in revenue positively with positive reduction revenue and concrete, but here again with the eye on increasing margins and profitability.
The marine market has remained fairly strong and this is without the infrastructure bill coming into play at this point, yet I think we will start seeing.
A lot more of that coming in maybe the fourth quarter and then start hitting us in the first part of next year.
Great. Thanks, very much and I'll pass it on.
Thank you for your time.
We will take our next question from Joe Gomes with noble capital.
Good morning, and thanks for taking the questions.
Good morning, Joe Good morning, Joe.
So Geoff maybe you can talk a little bit.
On the utilization and one of your goals was to improve it.
The utilization of the fleet and your equipment you mentioned.
Better utilization of today's call.
How much more do you think you can have there on the op side and what are you doing to try to continuously improve that utilization.
We have we've just put a couple of new marine.
Assets.
On the market recently.
That didn't happen in the second quarter, but it did happen.
Weak.
That could generate anywhere from up.
Low end of $3 million to a high end or maybe $4 5 billion.
To us its equipment that we have not been using we are bringing online a new dredge that'll be coming out in <unk>.
Tober will have significant impact to our or.
Both our revenue and margins in the fourth quarter of this year and of course line through next year.
Probably run at a much more efficient.
Pat.
Reductively of that vessel should be really strong for us.
And Thats coming out like I said in October , but we will continue to look at any asset this is not being deployed.
At a high level.
Okay.
You mentioned.
Briefly on the real estate sale and Youre going to answer some more talked about them some more in the Q&A.
Kind of where do we stand on east West and poor outlook.
<unk>.
We were hopeful that those deals last quarter were going to be we're going to be completed.
Maybe just give us indepth update.
On where we stand.
No.
East West you had talked previously about that could be worth significantly more if you.
Have you.
<unk> taken a couple of actions and where are you leaning towards now in terms of that property.
Yes.
I definitely got my hands around these all of these properties in this quarter and the past quarter and let me. Let me update you where we are we have two pending transactions at port Lavaka combined value of around $17 $5 million.
I believe that those transactions will take place.
In the third quarter to fourth quarter, but that would be completed but will you will have deals in place I believe in the third quarter.
Just don't have the closing dates are closing times on those deals particular time.
We are partnering now with CBRE.
We've developed a strategy and working on a strategy multiple tiered strategy and east West Jones at Baytown.
We're looking at a lease sale combination.
With some growth we're looking at a joint venture.
Some groups that joint venture would be get somebody that can help us remove.
The concept I was talking about before somebody to remove the fill and be a partner of ours in the process. Thus raise the money and we've got partners that we're also looking at a joint marketing our solution with local other landowners in the area.
We combined the properties that.
Combination of that will drive value and moving the properties as well.
These conversations are ongoing right now there are multiple tiered.
Two ways.
I would expect that we make.
To make a final decision on those in the next 30 to 40 days, depending on the input we get the interest we get but we're working down three paths to try to work out a strategy too.
Monetize those locations.
So instead of the previous.
Agreement that you have on east West is that now gone <unk>.
Terminated expired, however, you might want to term it.
We terminated they've asked to come back and they're just one of the other people that are looking at these solutions.
We are fully free and clear to do any one of these three directions at this time.
Okay great.
That's it for me I'll pass it on thank you.
Thank you very much thanks, Joe.
Our next question comes from Alex <unk> with B Riley. Please go ahead.
Thank you and good morning Austin.
Yes.
Can you mentioned you posted a profit in the concrete segment in June .
Has that continued NGL into July do you think we could see a profit for the entire quarter in the third quarter in that segment.
That's my expectation.
What we've done there is the big thing of concrete as I've said in the last call is that we were doing 70% of our projects profitably on margin as per our bill.
Our estimations.
What I've done with the team over there as we started removing locations that we've not been successful clients, we've not been successful with and situations that.
We just couldn't overcome.
This is a whole downsizing of the markets that we're that we're just not being productive at <unk>.
Taking that out.
Youre going to see a reduction in revenues, probably more like a little bit the division youre going to see a reduction in cost the division and we should see it increased.
Margins in the business and the consistency of those margins of the business but.
My expectation is to have less write downs of the problem there.
<unk>.
Push the profitability back and where it should be it won't all happen in the third quarter, but trajectory wise.
Look if a recruitment month over month over month.
Just kind of follow up on that answer you mentioned that you expect to sort of commercial revenue too.
I don't know.
Tail down a little bit.
But yet segment backlog in commercial concrete is incredibly strong at 322, that's up from $2 87 in the first quarter and Thats up from $2 24 last year. So.
How soon do you see that sort of tailing lower.
Well here again, I don't mind getting good revenue.
Youre going to see our central Texas area continue to reduce in size and in backlog and we are now.
We're not refilling that at the pace unless we get super margins on it.
An opportunity.
So we're being very cautious what we've made in how we bid there.
But the markets in Dallas, and Houston remained strong and those are markets that we have a history of producing margins and producing positive results.
So I think there's a combination of drawdown in some locations and other locations, we're going to take positive opportunities, where we can perform correctly.
That's very helpful.
Within your heavy civil segment, the backlog of $2 81, what portion of that is associated with dredging.
I don't have that percentage.
Tell you I would imagine it's around 30% to 35% it could be a little higher that goes depending on how many pieces of equipment, we've got working that changes pretty rapidly.
Youre going to see it grow to over I would take 45% to 50% the second half of the year as we outlined in.
The new dredge.
And that brings me back to Capex.
Understanding you've got us kind of a big capex spend year because of that dredge. What is your full year view on what the Capex spend could be in total for 2022, and how do you see that turning in 2023.
Well actually I see it going up in 2023, when the new management team gets here and that creates their strategy.
Theyre going.
We're looking at a couple of others.
Adjacent markets at this particular point that would be conducive for us to look at and go into.
But right now at 16 this year I would believe that we're going to be looking at some.
Some more.
The following year, probably another $2 million to $3 million at this point and a lot of it would also depend on exactly what we're going to do with ERP.
Next year and those decisions will be made probably in the next 30 to 45 days.
Thank you very much very helpful.
Thank you Allison.
As a reminder, everyone that is star one to ask a question we will take our next question from Michael Rodriguez with Stonegate capital markets.
Good morning, everyone. Thank you for taking my questions.
Good Marco.
I was wondering.
My follow up question in regard to the concrete market and central taxes.
Yes, obviously confirming the central taxes, you guys are defining as Austin and San Antonio.
And if you can maybe help us understand a little bit there, obviously youre going to be reducing the exposure to that particular area and taxes can you give us a sense of as far as mix is concerned between your revenue mix, rather between south north and Central Texas.
Well.
At the end of the day Central Texas is probably our smallest region. While it is our smallest region and concrete by a stat substantial amount.
So it probably would represent it represented probably about 20% of our total work.
Factory.
The problem is that 12% was really struggled to make any profit margins at all for us over the last two years.
And we've got a lot of things change it tried to change management tried to change bidding.
Bidding processes estimating processes, we just have not.
That build a better mousetrap out there over the last few years and so we've just taken a realistic view at the market and we just need to downsize.
Very strongly down there and only take jobs down there that we can truly predict our margins.
To come through.
So that's going to really cut that market down substantially over the next probably three or four months.
Got it and can you maybe discuss some of the dynamics youre seeing that make central taxes.
Much more difficult for you guys. When it comes to bidding I mean, Austin is obviously also still seeing quite a bit of growth as compared to Dallas and Houston, just just kind of help us understand some of those dynamics.
Let me, let me put it this way let me look at why Houston and why.
Dallas is doing much better.
We have people in both those markets that have been around the company for many many years.
These are folks that know the market.
I understand all the difficulties.
Understand how.
Concrete the suppliers work with US we have most favored nation status with a lot of our vendors and we have a very good relationship of our relationship with lot of our clients that we've had for many many years all those things take out risk and all those things add to predictability. So we're just well established.
And the Houston, and the Dallas market, and I think that adds to our ability to be profitable predictable and that results. If you look at the Austin market.
San Antonio market those are markets that we tried to grow and expand into.
And we just have never gotten a good footing download in those markets.
Had to change our people we've tried to change our personnel and a sense of.
The field.
Clients that are new to us that we haven't had a long term relationship with <unk>.
It's different down there in that area. When it comes to rules regulations process procedures that have impacted some of our projects as well. So it's I believe it's more about the unknown.
The risk.
Profile, that's down in Austin, and San Antonio for Us at.
At the other day, we got to admit when you can build a good team and when you can pull together when you can't and that's the thing we've dealt with very clearly now and we're moving on.
Got it very very helpful.
Also I was just kind of curious here on the low bidder numbers that kind of stood out to me with marine at $1 49 and concrete it for.
Kind of looking at the fact that those numbers are at the high end and the low end of your historical.
Ranges if you will.
Is there something that we should kind of read into that those numbers.
It was probably the answer I should have given Alex.
When you see a low a low number low bid.
Right that's exactly my point.
We're being very careful what we're bidding right now that we're going to have profit in the work.
So indirectly that's left.
<unk> proof that we're not chasing revenues in concrete at this moment attack.
We're going to we're going to be very disciplined in our approach so that shouldnt whereby it is a good answer for you, but it should have been my answer for Alex Let me ask the question.
So so we are focused totally on our capacity that we have in marine looking for great opportunities that are timed well for us and Thats what happened in this this last quarter, we were able to negotiate some things and marine that give us that look not only at 22, but go out to 'twenty three.
As well these are more long term projects that we were trying to finalize one of the reasons there is still a little bit in that.
Contract forms because we're still working out the details of the contracts.
Got it very helpful. And then just last quick kind of follow up on the East West Zone sale very helpful color that you provided.
I don't know if I caught the do you have any sort of.
<unk> are a timeframe when you think that might.
Come to fruition.
Well, if you knew the pressure that I was putting our people to get an answer.
My timeline is I wanted to have this done before before the end of August I don't know if thats realistic with everything thats going on in the markets today.
The money in capital well, we are definitely.
All hands on deck with our partners.
CBRE and I think that they're a great team down here Theyre very knowledgeable in the end markets in Houston.
They know how important this is to us.
<unk>.
I know, we remind them a lot about trying to get to a solution will continue to press.
I can't predict how the markets are going to work, but I can tell you the effort the focus and their determination is all intact and all at a place. If we got solid offers we're not going to grind out a few extra bucks. We want these properties gone we want to make sure that we move on and do what we're supposed to be doing let's run a business that.
Real estate.
Got it. Thank you guys very much for your time I really appreciate it.
Thank you. Thank you.
As a reminder, everyone that is star one to ask a question we will take our next question from Poe <unk> with Alliance Global partners.
Morning.
If you could just highlight on CT lavage.
A little surprising that there is another $12 5 million of potential proceeds there can you just talk about the old deals 5 million and whether the new deal is 12, 5% or have the parameters changed on the two different bids that you have right now.
They are changing a little bit.
We have a brand new offer that's come in on the <unk>.
On the one property.
It's increased from the five.
For a lot of positive reasons.
So we're working on those details right now and try to close that deal. The other one is a.
The other property is going to be a sales leaseback.
Our final finalize the terms of that deal hopefully in the next two to three weeks.
Great and then previously we've talked about working estimate under the old deal for East West John .
As I recall the mid Thirty's.
Can you give us an idea of sort of your targeted proceeds there I know there is a couple of different.
Possible avenues, you go forward as far as the joint venture or other things, but sort of what's the working estimate on the value of that property.
Well, if you think about the three different opportunities, we have where we do a lease and sale, where we at least part of it out and sell part of it.
I think the numbers still hold I think youre still looking at approximately a 30% to $35 million number of value.
The property as is.
With a lot of feel on it.
But with our sales leaseback it depends on how we how we break that out if we did a joint marketing that number would hold.
Would have a better chance of selling because the other mark to the other locations. We're talking to you don't have to fill on it and it's something that people could work out overtime and not have to have the access to the property immediately.
So thats an opportunity now if we get into the joint venture, where we have an individual that comes in and worked with us to remove fell over a period of time.
That will probably.
We'll definitely raised the value of the property, but that we were sharing in that upside with our joint venture partner.
Great reading into the second forward of ensuring that capability to capture all cost escalators.
Can you talk about potentially where you are seeing cost pressures both on the concrete side and then and then also on the marine side.
And then Austin you offered a targeted margin for the awards that you had in marine of 10 to 12, 5% gross margins could you do the same thing on concrete.
The margins they offer <unk> Murray just to make sure it's clear as some of the new work that we've just the pain.
Some of our work now in the past has been a little bit lower right. Now. We're just we're very focused on making sure that we improve our margins on everything we bit so going.
Forward those are new goals and objectives for us.
The same thing does lie in concrete.
We are basically looking at a 10% or better a margin target and concrete and everything we bid right now.
I don't want to give anything more way or more details away from that.
But at the end of the day, we are definitely increased what our minimum requirements to bid or internally.
And then just to clarify when you talk about target margins is it gross margin EBITDA margin.
Can we just clarify that definition every gross margins.
Okay, and then can you talk about cost pressures.
Yes.
It's across the board I mean concrete, but first of all availability of concretes are challenged.
It goes up and goes down in the Houston market.
The Texas market itself, but.
But the cost is up without a doubt we need to build those escalations.
I look at the roofing industry, you can't side of roofing contract out without escalation clause.
We're doing that a lot more in our contracts and our agreements now going forward.
Going back and talking to our existing clients about these issues and for the most part they've been incredibly cooperative and very very understanding of it is just a fact, it's not something that we're trying to leverage them, but it's a real fact, so we're being very proactive on those fronts, but you are seeing in the fuel prices, we're seeing it in concrete.
Actual costs that we're seeing is steel.
And any kind of metal.
At home.
Market, we're seeing awarded framing and things like that that we have to purchase in lumber. So we just bottom line is we're working closely with our clients in all of our new beds to make sure those things are included.
And our bids are time sensitive.
And we're also going back to their own clients.
Great. Thanks for your time.
Thank you thanks, Bob.
We have a follow up question from Joe Gomes with noble capital.
Yes, just one quick follow up you guys had previously been guiding into the mid Thirty's and the adjusted EBITDA range and wondering if youre still sticking with that or are you, making any changes with that guidance.
Well right now to be candid with you with the new leadership Covenant Board.
Just giving them a little bit of leeway as they work through the process.
Im internally looking at 25% to 30 at this point I think that it's.
I feel we have the ability to get to 30, but I mean, I think that we just have to be sensitive about we've got we've had the change of me coming in we've got a change of another group coming in.
Going to take them, a little longer to get up to speed that it did me.
To get going there, but I feel confident that the team is in a place where we're very focused on margins very focused on.
Doing better and perform better over the second half of this year I think situations are.
Are good for us to have a better second half than we did the first half.
I think.
I'm looking at $25 30 at this point multiple times.
Okay.
Pretty substantial drop in the long run there from the from the mid Thirty's previously, especially when Youre looking at Youre, saying things are improving I'm not quite sure. Following on why it would be going down that much.
Well first half this year was was what was pretty low.
8 million eight eight point.
Well right now so if you look at it from what we got done in the first half and then you start looking at 33% to 30 plus.
In the second half here those are some really good sized numbers im not saying that we can't get there I'm just saying that we are going to have another change in leadership, we are going to have some cost here going forward to make some of those changes.
And we just got to be by just trying to be realistic with everybody in that half.
There are a number thats.
Maybe not obtainable, but we're working towards the 30, we have our plans to get to the 30 are just being cautious.
Okay. That's fair enough. Thank you.
And that does conclude the question and answer session I would now like to turn the call back over to Fran Okoniewski for any additional or closing remarks.
Hey, Thanks, Lisa and thanks, everyone for your interest in joining our second quarter results Conference call. We look forward to speaking with you again in October to discuss our third quarterly results.
Thank you and have a great day.
Thank you and that does conclude todays presentation. Thank you for your participation and you may now disconnect.
[music].
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