Q2 2022 Ducommun Inc Earnings Call
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Good day and thank you for standing by welcome to the Q2 2020 to Ducommun earnings conference call at.
At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.
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Please be advised that today's conference is being recorded.
I'd now like to hand over to <unk> to comment V.
D P CFO controller and Treasurer, Chris Wampler Wampler. Please go ahead.
Thank you, Chris and welcome to Ducommun 2022 second quarter Conference call with me today are Steve Oswald Chairman President and CEO.
Going to discuss certain limitations to any forward looking statements regarding future events projections or performance that we may make during the prepared remarks or the Q&A session that follows.
Certain statements today that are not historical facts, including any statements as to future market conditions results of operations and financial projections are forward looking statements under the private Securities Litigation Reform Act of 1995 and are therefore perspective. These forward looking statements are subject to risks uncertainties and other factors, which could cause.
<unk> actual results to differ materially from the future results expressed or implied by such forward looking statements. Although we believe that the expectations reflected in our forward looking statements are reasonable we can give no assurance that such expectations will prove to have been correct. In addition estimates of future operating results are based on the company's current business, which is subject to change.
Particular risks facing ducommun include among others. The cyclicality of our end use markets the impact of COVID-19 on our operations or customers the level of U S government defense spending timing of orders from our customers legal and regulatory risks the cost of expansion and acquisition competition geopolitical developments and disaster.
Natural or otherwise these risks and others are described in our annual report on Form 10-K filed with the SEC and our forward looking statements are subject to these risks.
Statements made during the call are only as of the time made and we do not intend to update any statements made in this presentation, except if and as required by regulatory authorities. This call also includes non-GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the GAAP to non-GAAP measures referenced on this call.
We filed our 2022 second quarter Form 10-Q, with the SEC today I would now like to turn the call over to Mr. Steve Oswald for a review of the operating results Steve.
Okay, Chris Thank you and thanks, everyone for joining us today for our second quarter Conference call.
And as usual I will give you an update on the current situation of the company.
Afterwards, Chris will review our financials in detail.
The company remains focused first and foremost on the health and safety of our employees.
The team has done an excellent job of safety protocols put in place since March 2020.
To follow our best practices in line with health authorities.
Within the company, we had 106 cases.
In Q2 of 2020 two.
Turning to the Q2 financial results Ducommun second quarter performance was very good the company delivering year over year revenue growth of 9% in line with 2022 guidance.
The commercial aerospace market continued recovery was a real bright spot Q2 with.
With Boeing 737, Max business up over 200%.
Year over year, and the Airbus <unk> hundred 20.
<unk> has significant increase over 200% growth year over year.
Overall commercial aerospace with Airbus Boeing Gulfstream and others was up over 50% from Q2 2021.
I just wanted to add that our commercial aerospace business showed year over year growth now for the fourth consecutive quarter.
An excellent sign and we're just getting started.
The company's business and defense as well as the tremendous growth of roughly 40% over the past two years in 2020 in 2021 was only down slightly in Q2, but still delivered a solid performance of over $100 million in revenue.
The company posted solid gross profit of 19, 9%, which was down year over year was partially impacted by several onetime factors, which Chris will cover in his remarks.
In addition, we had strong bounce back for adjusted EBITDA margins to 13, 8% in Q2 from the Q1 number which is very nice to see I expect EBITDA to continue to grow in the quarters ahead.
The team also posted adjusted operating income margins of eight 2%, which is good progress through the first half of 2022 as we continue to build on our track record of effective operational leadership and cost management.
The volume of our into solid to what the company, reaching GAAP diluted EPS of <unk> 34 cents a share versus 69 cents a share for Q2 2021, and adjusted diluted EPS of <unk> 76, a share versus <unk> 81.
In 2021.
Some key drivers for the lower diluted EPS include restructuring charges Gliomas fire related expenses and inventory purchase accounting adjustments for the Max deal acquisition last December .
On the customer side Raytheon technologies was again, our number one customer in Q2 revenue and we continue to benefit from the strategic supplier agreement signed with them back in 2019 for the missile and defense business.
We've been hard at work with current and new programs Offloading and share shifts with them and look forward to continuing to leverage that relationship in the second half of this year and 2023.
We're also taking that model now to Northrop Grumman.
Year to date is our third largest customer revenue.
And she has been a real success story for ducommun since 2018.
We have almost doubled the business. This is all part of our plans to build a second offence prime customer.
So the $150 million a year, we do right now with Raytheon.
I've also mentioned in the past about the Offloading from defense products and the benefits for the company.
The work continues we will meet our target of about $45 million in 2022 up from roughly $31 million in 2021.
It was unexpected double it to $90 million plus in 2023 with a great deal of that in our circuit card business for Raytheon.
Our Q2 highlights from Raytheon was the latest Offloading win for US on circuit cards for the next <unk>.
Generation jammer.
This will be a top program moving forward for the defense industry.
The initial order.
In Q2 was over $15 million.
Possibly reduce that our Appleton, Wisconsin facility.
And it was one due to a high level of performance and strong relationship.
We're also driving the S. P Y six offload for circuit cards, and a 500 of the first car built and tested with excellent results.
This is another top program for us it is growing at a conservative pace, which it should.
Also be full turnkey on this car to Q2 of 2023.
The best News is the long term run rate of programs already commercialized or in development for Offloading, Florida common will be over $125 million by 2025.
For backlog performance of commercial aerospace backlog increased sequentially from the fourth quarter fourth consecutive quarter from $276 million at the end of Q2 2021 to 419 million at the end of Q2 2022.
And over 50% increase.
This was led by the 737 Max Viasat for in flight Entertainment. The <unk> hundred 20, <unk> hundred 20 and Gulfstream.
Or would you would expect after coming out of a very tough 2021 for this part of the Collins business.
The first backlog remains solid in Q2, as well and ended the quarter at $494 million.
The book to Bill ratio of Q2 was one one.
And we are thrilled that for the second consecutive quarter. The backlog for Q2 reached a new all time high of $976 million for the company.
These cost actions and lead organizational structure continuing to pay dividends too.
Our supply chain team delivered another excellent quarter managing materials, along with SG&A spending in particular at the corporate level among the best in the industry.
In regard to the revenue outlook comments made last quarter, we continue to see the company at a high single digit this year with commercial aerospace industry recovery continues to move forward along with our significant backlog in defense.
We estimate that revenue will remain very good over the quarters ahead as you see more and more commercial aerospace volume return.
Our high narrow body wide body ratio for the business will also help based on the current challenges facing widebody aircrafts there'll be we're very happy for us in the entire industry to see the 787 news last Friday night.
The other bright spot for ducommun as our business aviation portfolio.
More than 50% in revenue year over year, with a very strong backlog, especially with Gulfstream.
Another important area for the company investors as M&A.
To be active looking for companies that fit our model continue to be an accelerated to higher results now and in the future.
We had a significant win with the acquisition of Maxiell in December .
I'm happy to report that the numbers are ahead of plan.
<unk> intact and growth plans on revenue investment and pricing on the move.
Another highlight is our normal business acquired in Q4.
2019, we're bringing on a new program in the second half of this year, so far the new Oshkosh Stryker vehicle with the ammunition handling system.
We will be sole sourced and will increase revenue significantly in the second half of 2022.
Finally, we announced and commenced a restructuring initiative in early Q2.
Our team has taken this action to accelerate the achievement of our strategic goals to better position the company for stronger performance now and in the future.
While we were finalizing some details as to the timing of certain remaining actions and the operation is affected including facility repositioning related expenses and Paramount of long lead long lived assets and severance we've already taken some actions and related charges during Q2.
Now, let me provide some color on our markets products and programs.
Beginning with our military and space sector, we posted second quarter revenue of $106 7 million a decrease versus 2021.
<unk> being down as mentioned earlier was greater than 100 million. So it was a solid showing for the business in Q2.
We saw increases in demand for F 18, F 16 ages mirror missile Maxiell products and Gator radar systems.
Second quarter military and space revenue represented more than 60% of the commentary revenue in the period down from 70% last year and.
This will be changing more overtime to reflect more balance with our commercial aerospace business.
We also ended the quarter with a solid backlog as mentioned earlier 494 million, which represents 51% of the comments total backlog.
Within our commercial aerospace operations second quarter revenue increased year over year to $57 1 million driven.
Driven mainly by bill rate increases or large aircraft platforms business aviation in flight products or Viasat and other commercial aerospace platforms.
The common expected continued improvement in the commercial aerospace markets overall for the rest of 2022 and 2023 and the future is very bright across our product offerings, including our industry, leading titanium structural business.
The backlog within our commercial aerospace sector stands at roughly $419 million at the end of the second quarter and as mentioned was over 50% increase year over year from Q2, 2021.
With that I'll have Chris review, our financial results in detail, Chris. Thank you, Steve and good day to everybody. As a reminder, please see the company's 10-Q and Q2 earnings release for further description of information mentioned on today's call as Steve discussed our second quarter results reflected another period of solid performance. The second quarter saw a strong increase in commercial aerospace.
Base revenue, we remain encouraged by the continued strength in the overall travel demands, which should drive higher demand and shipments going forward. We're pleased with many aspects of our first half of 2022 and are looking forward to building on this performance and believe we are in position to do so.
Now turning to our second quarter results. Let me review some of the highlights revenue for the second quarter of 2022 was $174 2 million versus $160 2 million for the second quarter of 2021, the year over year increase reflects $19 5 million of growth across our commercial aerospace platforms, partially offset by $6 3 million of.
Lower revenue within the military and space sector, a portion of the year over year increase is directly attributable to Maxiell, which we acquired in December of 2021, thus our overall growth was a combination of organic and inorganic growth.
Commons overall backlog at the end of the second quarter was approximately $976 million, an all time high for the second consecutive quarter. This reflects recent growth across our commercial aerospace commercial aerospace platforms setting up the company for a strong top line performance for the second half of 2022 and beyond our defence backlog remains strong at $494 million.
And we remain positioned for a strong second half of the year for our defense business.
As a reminder, we define backlog as potential revenue based on customer purchase orders and long term agreements with firm fixed prices and expected delivery dates of 24 months or less.
In total gross profit of $34 $6 million for the first quarter versus $36 $8 million in the prior year period, while gross margins were 19, 9% and 23% in 2022 and 2021, respectively.
The decrease in margin versus a fairly strong compare last year reflects short term changes in the product mix, partially offset by favorable manufacturing volume from commercial aerospace and our continued focus on cost, which we've done an excellent job.
We certainly expect over time that our segment and company margins reached the type of levels, we were able to achieve pre pandemic.
On an adjusted basis, our gross margins were 21, 1% in 2022 and 23, 4% in 2021, we're sharing the adjusted gross gross profit as we have more non-GAAP related cost of sales items and most of that than most quarters. Examples of these include our guaymas fire related impact our maxiell inventory step up.
And our inventory related restructure costs. In addition to these please keep in mind that the incremental rent and property taxes, resulting from our Gardena sale leaseback in Q4, 2021, which overall was a major benefit for the company investors added 8% to the cost of sales in Q2 of 2022.
While viewing this by excluding the adjustments combined with the impact of the gardena related incremental costs, our GP would've been nearly 22%.
As well like all manufacturing companies, we are working in a difficult operating environment with regard to supply chain efficiency and labor availability, while we're not immune to supply chain issues, we were able to manage through another quarter without significant supply chain impacts due to our proactive supply chain efforts executing strategic buys leveraging our performance center flexibility in utilizing.
Tori that we had invested in previously in the past month challenges around things like material availability, while still manageable are becoming more prevalent.
The level of gross profit adjustments will ramp down throughout the remainder of 2022, and we are confident that we will.
We continue our margin expansion journey in 2023 and beyond.
Ducommun Ducommun reported operating income for the second quarter of $7 $8 million or four 5% of revenue compared to $13 $1 million or 8% eight 2% of revenue in the prior year period adjusted.
Operating income was $14 $2 million or eight 2% of revenue this quarter compared to $15 million or nine 4% of revenue in the comparable period last year. As a reminder, our definition of adjusted operating income starting last quarter includes an add back for acquisition related intangible asset amortization expense.
As a result of this change we have recast prior comparable numbers using this methodology.
The company reported net income for the second quarter of 2022 with $4 $1 million or <unk> 34 per diluted share compared to net income of $8 4 million or <unk> 69 per diluted share a year ago. The decrease year over year was primarily due to lower gross profit of $2 1 million and higher restructuring charges of $3 2 million of which.
<unk> 5 million was included as cost of sales on an adjusted basis. The company reported net income of $9 3 million or <unk> 76 per diluted share compared to net income of $9 9 million or <unk> 81 in 2021.
Adjusted EBITDA for the second quarter was $24 1 million or 13, 8% of revenue compared to $23 4 million or 14, 6% of revenue for the comparable period in 2021.
Moving back to $24 million to a $24 million. Adjusted EBITDA result is a nice step up sequentially from the $21 million in Q1 of 2022.
Now, let me turn to our segment results.
Our structural segment posted revenue of $64 $5 million in the second quarter of 2022 versus $57 4 million last year. The year over year increase reflects $12 8 million of higher sales across our commercial aerospace applications, partially offset by $5 8 million of lower revenue within the company's military and space markets structural systems.
Operating income for the quarter was $1 3 million or 2% of revenue compared to $5 6 million of 99, 7% of revenue last year. The year over year operating margin was primarily due to unfavorable product mix, excluding restructuring charges and other adjustments in both years.
Segment operating margin was nine 4% in 2022 versus 12, 4% in 2021.
As a reminder, the results of our from our Mexico business, which was acquired in Q4 2021 are part of the structures business.
Our electronic systems segment posted revenue of $109 7 million in the second quarter of 2022 versus $102 8 million in the prior year period. These results reflect $6 7 million of higher commercial aerospace revenue, partially offset by <unk> 6 million of lower revenue across the company's military and space customers electronic system.
Operating income for the second quarter was $13 6 million or 12, 4% of revenue versus $14 4 million or 14% of revenue in the prior year period, primarily reflecting unfavorable product mix, partially offset by favorable manufacturing volume.
Excluding restructuring charges and other adjustments in both years. The segment operating margin was 13, 9% in 2022 versus 14, 3% in 2021.
During our Q1 call and as Steve mentioned, we announced a restructure initiative that had commenced.
Our team is taking action to accelerate the achievement of our strategic goals and better position the company for stronger performance in the short and long term during Q2, we incurred $3 $2 million in restructure charges. The majority of these charges for severance and benefit related we expect to incur another 3 million to $5 million of expense for facility consolidation severance and impair.
Women of long lived assets over the next several quarters.
Turning to liquidity and capital resources, we have available liquidity of $137 million, we generated $25 million of cash from operations this quarter compared to $5 5 million in the prior year period.
This was a strong result for the company and we expect to see our contract assets to be a year over year cash inflow catalysts over the next several quarters.
Our 12 month debt to adjusted EBITDA ratio was two four and remains amongst the lowest in the last several years.
In terms of capital expenditures, we spent $4 $2 million during the quarter going forward, we anticipate spending between $17 million and 19 million for the full year 2022 for sustaining capital and ongoing product development.
As Steve mentioned earlier subsequent to quarter end, we previously announced we completed a refinancing of all of our debt on July 14th with favorable terms the.
The new credit facilities are comprised of a $250 million term loan a and a $200 million revolving line of credit. So we upsized our revolver from 100 to 200 million the new credit facility has a five year term and will mature in July 2027. In addition at the same leverage ratio the interest rate spread and our new credit facility is more than the 200 is more.
Than 200 bps lower than the term loan b that we had at the end of Q2, 2022 and slightly favorable to the term loan a that we had at the end of Q2 2022.
In conclusion in the second quarter, we posted solid results, while growing our commercial aerospace backlog setting us up for continued strong performance for the second half of 2022 and beyond our Q2 performance supports our view of 2022 was a transition year with momentum and performance performance building as we move through the year.
Now I'll turn it back over to Steve for his closing remarks, Steve Okay, Chris Thanks, and just in closing just a few a few comments here well certainly it was very clear and solid first half of a common coming out about another tough year in 2021.
For me the same the same commercial aerospace recovery going to the next level.
I believe expenses in good shape, especially with our Offloading.
Activity is still a high our acquisitions are performing at a very good level and bringing on new business that we do have a lean cost profile I think thats benefited us throughout.
The pandemic and obviously in 2022, and we had an excellent refinance refinance any outcome.
I think it's going to help drive the company to the next level with strong funding so.
Those are just some of my thoughts.
As we wrap up the comments I'd also like again this quarter it takes time.
Thank my team for the common employees, along with our investors suppliers and our other stakeholders for their support.
We've been through an unprecedented time in the past few years.
And I believe are in excellent shape on moving forward, we've done a great job managing the business and maintaining a level of excellence in 2020 in 2021.
I think all of that hard and smart work well.
We will pay off in the next few years.
So with that I'll open it up for questions. Thank you. Thank you Andrew.
As a reminder to ask a question you will need to press star one one on your phone standby as we compile the Q&A roster one moment. Please.
Our first question is coming from Ken Herbert of RBC capital markets. Your line is open.
Hey, good morning, guys Stephen Chris.
Hey, good morning, good morning, Ken.
Hey, Steve I, maybe just wanted to start off you know most of your defense customers and peers have seen a pretty significant supply chain disruptions in the second quarter.
And then subsequently allowed to them are calling for a pretty significant sort of inflection positively in sales into the back half of the year as some of these near term issues are transitory and get worked out to what extent were you seeing similar supply chain constraints or to what extent has that may be impacted your business in the second quarter and then.
Similarly are you are you also perhaps looking on the defense side for an inflection at some point in the back half of the year in line with what a lot of your customers expect to see.
Yes, Ken Thanks.
I appreciate the question so first.
We.
<unk> got a fairly good job of first half of 2022.
We are also we have a little bit of we have an inventory strategy. We do we do build inventory in certain areas or certain customers. So I think that's paid for us paid off for us as well as further certainly in our circuit card and connector.
Businesses. So I think we have been able to manage it may be a little bit better than others.
Because of that so that's my first comment.
We think that.
Still going to see some challenge, especially when it comes to our current business.
I think that.
For other businesses like titanium sheet and other things we feel like we have that managed well always have an inventory position, where we're comfortable for the second half of the year, but I do think that at.
At least in Q3 Q4, there I think there's going to be still some challenges on certain cars, but we have a plan to kind of work through it.
We don't think it's material.
Okay I appreciate that.
And if I could I appreciate the detail you provided on the on the Offloading opportunity.
You mentioned that business or that opportunity grows or doubles in 'twenty three with.
With an opportunity up to $125 million or so in 'twenty five.
How should we think about the margins on this offloaded work to what extent are you may be getting a little aggressive initially to win some of this work and as that volume grows in terms of the offloading, how accretive can that be to margins over the next couple of years I think a couple of things first look you know when.
We do offload from defense Prime.
To say small small, but a very low cost operation in Wisconsin, Our Tulsa, Oklahoma. Okay. We're already has very positive arbitrage. So we're able to provide that value, which obviously defense primes, what right along with our performance because there's two sides of the offline first you know.
Defense pricing to drive margins up they want cost savings, but they also need the parts. Okay. So we've established a track record I believe which is going to help us.
Near term and mid term as we move forward to the 125 I think margins are going to <unk>.
Fully be similar to what we're seeing in <unk>.
This is nodding.
<unk> had that we're going to probably see similar we feel that one of the nice things about Offloading is we do provide a lot of value there, especially coming from our high overhead.
Operations say the defense primes, so we're able to have a little bit more I believe.
A little bit more strength on margins as we go forward.
Down the road, we like we think the 125 number, especially with the <unk> six.
GJ I know you're familiar with it is.
That's that's going to be a great program for us that just came out one other thing just to add <unk> to the first question you had I mean, it's Steve sort of alluded to the fact that we have not had significant supply chain issues and part of that is the flexibility to be able to sort of be agile and to move around.
<unk> that are coming up which helps but to your question about the back half of the year. We don't have a huge pent up demand that's going to all of a sudden break free there on the customer side, maybe they'll demand maybe that'll break for you a little bit more for them.
But to Steve's point, we feel like we've made us feel it pretty well, but there's more work to do in the environment definitely definitely tough.
Great and just finally on commercial Aero nice to see some volume really flowing through there can you just comment where you are in terms of Max production rates and how you're viewing that through the back half of this year and into early next year, Yes, We're I would say to your point, we're thrilled okay.
As I mentioned, a couple of tough years, but I think we are a great position with the Max both it's both spirit and directly to Boeing.
We're running probably right around 28% to 31.
It moves around just maybe a little bit, but that's kind of what we're seeing we're expecting that and we're planning for that for the.
And through the end of this year and we're kind of just thinking that's what it's going to be at least through the first six months of 2023. So we're kind of holding holding firm on where we are right now.
Great. Thanks, a lot guys I appreciate the time guys.
Yes.
Thank you.
One moment please for the next question.
Our next question will come from Mike Crawford of B Riley Securities. Your line is open.
Thank you Steve maybe.
I have a different twist on the supply chain question, where I'm like Mercury systems, which saw Watson.
Typically these particular security semiconductor parts, youre, staying and labor <unk> technologies last night.
Talked about not having any issues in fact, having favorable.
Inventory cost of metal coming down, but more importantly.
As seen lead times come down and so the question I guess flipped for Ducommun is if Youre also seeing lead times come down does that mean that Conversely, we might see some kind of pause in orders from customers that.
Kevin can afford to wait to place their orders or work through some of these buffer stock so you've put in place to manage during this pandemic period.
Yeah, Hey, Mike, It's Chris I'll jump in first.
To that point and certainly you've got some some pretty real time information you're sharing with us they're on our side of it we're not seeing we're not seeing any consistent messaging of getting a position where lead times are coming down yet and.
Then to the extent that that does start to happen then I think we've got a little bit of we're a little bit away from where thats going to impact our flow as well.
In terms of what the customers are going to when they're going to build that and I. Just think there is going to take a while to get there but.
That's a little different messaging than what we've been seeing and talking about weekly on our obstacles.
Okay.
Alright, Thank you, Chris and then just a final question.
It relates to capital allocation.
You do have one other at least valuable California property are you exploring a sale lease back there as you did with your larger property last year, Yes, that's a great question.
I guess, it's a TBD I think that we do have one other major property.
We are.
We're always looking at providing I'd say, we're always looking to create value. Okay I mean.
The market's still strong out here, we're still I would just say at this point, we're still reviewing yes, I think thats fair to say and I think that you know that.
I, probably wouldn't want to leave it on the Q2 call more information to come.
Okay. Thanks, Steve Thanks, Mike Thanks, Mike.
Thank you.
And again to ask a question press Star one one on your phone.
One moment for our next question.
Okay.
And next we have Peter <unk> of <unk> Securities. Your line is open.
Hey, guys protection.
Thanks for taking the questions here.
But maybe.
Okay.
Two quick follow ups.
On the commercial Aero the structural systems Aero revenues down sequentially anything is that just timing or anything changing around there I know, you're just kind of laid out what you expect on the Max and kind of going forward, but any color on a little bit of a dip there.
No I don't think Mike I don't think Theres anything systematic there thats just more just a little bit of timing just a little bit.
No constraints, that's just more timing we're good.
We just got back from the Air show not too long ago, and I know people are uptight about engine forgings and can they should be but I mean from a comp perspective.
Hungary, we're excited.
Got it multi orders.
Okay, and then just on the.
The defense again, I mean, we obviously are hearing a lot from from your customers in the sector in general, but we are seeing pretty strong order flow out there and you had a little bit of a dip in the backlog sequentially. What are you seeing in the ordering environment.
And I guess the pipeline of opportunities in defense.
Yes, I mean I'll start it off.
Like a jump in I mean, I think on the defense side again go back to timing.
And two we tend to get needle movers that hit not a regular pacing. So we viewed it as a pretty is a pretty quiet run to the finish line on defense and usually that means there is some activity out there for us the next quarter, but just from an overall finger on the pulse of the activity and the opportunities there is still a good flow.
We don't want some major programs that tightens, Michael not go quiet.
Patchy some good good example.
Where things move around a little bit.
That.
We're going to see a little bit maybe a headwind every once in a while in a quarter just because of Fms Fms orders in and the budget. So I'll say a little bit of that but overall, we feel good about we feel very good about the orders.
Again.
Next generation Jammer, which just was.
Commercialized for the military in 2021, that's I think that's that $15 million and other things that are commonly we're pretty bullish.
Got it got it and then just on really good free cash flow in the quarter, even with some inventory build there and I think you said you could probably unwind some of these contract assets what should we expect for for second half free cash flow.
Yeah, I would expect well first of all Q2 was we felt very good about Q2, clearly our first half typically Q1 is very much an outflow quarter Q2, we start to break even generate a little bit Q3, Q4, I would look for look for us to sort of get the same type of performance in that six month period.
We saw in the three month period.
So I'd say, it's sort of that free cash flow that at $20 million is probably a pretty reasonable estimate out there.
Got it perfect. Thanks, a lot guys I'll jump back in the queue. Thanks, a lot thanks for being with us.
Thank you.
And again to ask a question. Please press star one one on your phone.
One moment I think compile the Q&A roster.
Okay.
And this ends the Q&A session I would now like to turn the conference back to Steve Oswald for closing remarks.
Thank you and thanks, everybody for joining us today and we also appreciate the support of a new time, we feel good about it.
Certainly like to hear your feedback.
As well, but we think this is a good thing for the company.
Think of our cadence gives us a little bit more of a window of opportunity with the analysts.
The two P M slot.
Civic times its bit crowded.
As you all know so.
Again, thanks for the change in the support.
We're excited about the future. We appreciate again all the support.
Wish you a great day, and a safe one and look forward to again speaking soon.
This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
Yes.
Yes.
Sure.
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Okay.
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