Q3 2022 Badger Infrastructure Solutions Ltd Earnings Call
Okay.
Good day, and thank you for standing by while country. The Badger infrastructure solutions 2022 third quarter results conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question. During this session you will need to press star one one on your telephone.
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Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Trevor Carson, Vice President Investor Relations and corporate development. Please go ahead.
Thank you operator, good morning, everybody welcome to our third quarter 2022 earnings call on the call with me. This morning are <unk>, President and CEO Mark <unk>.
In fact, our CFO .
But there is 2022 recording earnings release, MD&A and financial statement.
Were released after market closed yesterday and are available on the investors section of our website.
The CR.
We are required to note that some of the statements made today may contain forward looking information.
All statements made today, which are not.
I considered to be forward looking statements.
These forward looking statements based on certain assumptions that we consider to be reasonable. However forward looking statements are always subject to certain risks and uncertainties undue reliance should not be placed on the actual results may differ materially from those expressed or implied.
For more information about material assumptions risks and uncertainties that may be relevant to such forward looking statements. Please refer to badger's 2021.
Further such statements speak only as of today's date.
Undertake to update any such forward looking statements.
Now I'll turn the call over to Rob Thanks, Trevor and good morning, everyone and thank you for joining our Q3 earnings call.
I'm pleased and excited to be joining this call for the first time as badger's, President and CEO following a successful transition.
On October one.
As always we would like to start the call with a health and safety update.
As evidenced.
By our revenue growth and building momentum in the business. We are confident that pandemic related issues are largely behind us in the fourth quarter continues to progress without any pandemic related issues.
This is especially important as we begin November with a focus on enhancing utilization in our typical seasonally slower months.
We are focused on continuing to improve upon our leading safety culture.
With a focus on making sure our team and clients make it home safely each and every day.
Now onto the quarter.
The improving market activity and customer demand trends experienced over the first half of 2020 to continue throughout the third quarter.
Coupled with operational and cost management efforts, we experienced meaningful year over year improvements in our operating leverage and margins.
Overall, the third quarter was in line with our expectations.
Year over year quarterly revenue grew by 20% supported by balanced revenue growth across all our operating regions.
Similarly, all operating regions experienced positive operating performance, resulting from increased pricing.
Improved.
Full recovery and cost controls.
This resulted in better operating leverage as highlighted by our improved EBITDA margins.
We anticipate that improving market conditions and customer demand trends will continue for the balance of the year.
These trends are supported by improved macroeconomic conditions across the broader nonresidential construction activity in the U S and a previously weak sectors, such as oil and gas.
Even though badger has managed well through the recent inflationary environment through better realized pricing cost management efforts and its fuel recovery program. We are still very focused.
On improving operational performance.
Let's go a little deeper into the revenue trends.
Revenue was up 20% from last year to $163 million, which continues to reflect the market recovery.
We have seen since October 21.
Higher revenue and more consistent volume.
Supported improvements in our operating leverage.
All operating regions experienced year over year, and sequential revenue growth and improving margins from higher revenue.
Our truck utilization stronger pricing and cost controls.
This resulted in a year over year improvement in adjusted EBITDA margin to 21, 6% from 19% year over year after adjusting for the $2 4 million.
In Canadian employee wage subsidies that badger received in the third quarter of 'twenty one.
The 21, 6% adjusted EBITDA margin for the quarter Understates, our true performance as we have pre invested in operational and strategic priorities, namely sales and marketing programs.
To support future revenue growth to achieve our long term strategic objectives.
Regarding our free investments, we have hired on boarded and trained our new sales and marketing teams, who continue to build momentum daily.
Their primary focus and by extension our initial measure of success.
To drive new customer opportunities in the fourth quarter to help lift the seasonal shoulders and drive more.
Consistent volume over the course of the full year.
This will have the added benefits of stabilizing margins and addressing some of our operator retention and turnover headwinds and the colder more seasonal months.
We also continue to be excited about our asset utilization improvements.
Q3 revenue per truck per month, or RPT was approximately $47000, which was up 24%.
Versus last year, and 16% sequentially from Q2.
We ended the quarter with 370, non destructive excavation units compared with <unk> hundred 53 at the end of Q2, reflecting a net increase of 17 units.
Our ability to manage available fleet in real time is a significant competitive advantage for badger.
As we position the fleet while concerning availability in some regions, we can drive utilization and higher pricing, where we have good opportunity.
Trucks are being added in markets that demonstrate strong revenue growth high RPT and strong asset utilization as.
As we've said in the past improving our utilization has a material impact on how we manage retirements how.
We think about the number of units needed to achieve our growth targets and the appropriate level of invested capital.
Our continued focus on fleet utilization also translates into improved labor utilization.
We have sufficient operators to support our current fleet size and continue to recruit.
New operators to support anticipated additions to our fleet over the remainder of this year.
Let's discuss.
Our manufacturing.
Badger manufactured 29, non destructive excavation units in the third quarter and 66 units year to date in 2022 versus four to 17 years, respectively for the same periods in 2021.
We are now forecasting to build approximately 115 non destructive excavation units.
Down slightly from our previous guidance.
And the retirement of approximately 80 units in 2022, consistent with our previously provided guidance on retirements.
The lower billed total for.
For the year as a result of numerous initiatives that have happened at our red deer manufacturing plant, which include the rollout of the MRP system.
The consolidation of multiple facilities in late Q3 and Q4.
We are confident we can achieve this revised target.
As we are currently manufacturing four to five trucks per week.
And it will not have an adverse and the adverse impact on our performance expectations for the balance of the year, given our ability to flex utilization and operating leverage.
We are currently planning our build program for next year, and we'll provide an update during our upcoming Q4 call.
Which is consistent with past practices.
With our new manufacturing leaders successfully on boarded we expect to be running at peak efficiency next year, which will allow us to absorb our planned retirements and meet our growth needs without constraints.
We remain comfortable with chassis and key component availability and do not expect to be impacted materially by supply chain disruptions.
Based on the company's supplier relationships and inventory planning completed this year.
Market indications suggest that non destructive excavation equipment will be in high demand.
And more difficult to source over the next several years.
Which makes our market position and vertical integration that much more valuable.
Unless there are additional geopolitical or macroeconomic disruptions, we see conditions to be favorable for continued progress.
And growing the business, improving our operating leverage and returning to historical margins as the recovery continues and we execute.
On our commercial strategy.
I will now turn the call over to Darren to discuss our financial results.
Thanks, Rob and good morning, everyone, Rob congratulations on the new role.
As Rob mentioned, our revenue in the quarter with $163 million.
Up 20% from the same quarter in 2021.
As reported gross profit margins improved to 27, 4%.
<unk> 27, 3% third quarter of 2021 after adjusting for the $2 $2 million and Canadian emergency wage subsidy programs are key benefits.
That you received in the third quarter of 2021 and did not recur in the third quarter of 2022, our adjusted year over year gross margin improved 170 basis points.
During the quarter, we continued to invest in sales and marketing capabilities to support future growth. These.
These investments in our capabilities resulted in approximately 200 basis point reduction in gross margin in the quarter to grow revenue in future quarters. As a reminder, our sales and marketing expenses are included in our direct cost line of the P&L.
Our as reported adjusted EBITDA margin improved to 21, 6% compared with 28% in the third quarter of 2021.
Adjusted for the $2 $4 million in acute benefits received in the third quarter of 2021, which did not reoccur in the third quarter 'twenty two.
As a result, our year over year adjusted EBITDA margins improved 200 260 basis points.
During the quarter, we incurred one time expenses related to the CEO transition and director Onboarding, which were included in our G&A expenses.
These onetime costs, resulting in approximately 100 basis point reduction.
Our margin.
Overall, the investment in our sales and marketing capabilities and the onetime G&A expenses resulted in an approximately 300 basis point reduction in adjusted EBITDA margin for the quarter, which underscores a very strong year over year margin improvement.
However, more than we reported.
As Rob mentioned earlier, we see the current quarter costs, we see the current quarter costs in sales and marketing capability as an investment to position Patrick for growth in North America, non destructive excavation industry.
Now onto the balance sheet.
Management teams are focused on ensuring the strength of its balance sheet and financial flexibility.
We've continued to make meaningful progress in accounts receivable management.
The collection of longer dated receivables at the end of Q3, 77% of our receivable portfolio was aged less than 30 days, suggesting a stronger portfolio position with dsos of approximately 94 days as reported in the quarter.
We believe there is still going through improvement in our Dsos, which we continue to work towards.
We continue to maintain our $400 million Canadian.
Committed credit facilities, which provides us ample liquidity and financial flexibility to fund, both near term and long term growth and complementary capital allocations decisions.
Finally, the board has approved a quarterly cash dividend of <unk> <unk>.
Per share for the fiscal quarter ending in 2022 with payment to be made honor about sorry.
Fourth quarter with the payments, we made on or about January 15, 2023 to all shareholders of record on the close of business on December 31 2022.
I'd like to turn the call back over to Rob for the bank.
Thanks Darren.
So before we open it up for questions. Let me summarize Q3 demonstrated further progress and.
And tightening up our operating discipline.
And pushing our margins closer to historical levels.
Our opportunity to further drive operating leverage and asset utilization.
Gives us confidence in achieving our long term EBITDA targets.
Activity levels continue to build momentum and we are able to put our people to work effectively with.
With better results.
We are pleased by the continued improvement in market demand and revenue volumes in the third quarter with revenue up by 20% year over year.
Operating leverage benefited from revenue growth higher utilization cost management and pricing with the results in the quarter meeting our expectations.
Our view of the significant U S and Canadian long term opportunity for non destructive excavation services and Badger has long term growth prospects unchanged.
We believe.
That the United States focus on infrastructure support solid demand for non destructive excavation.
Rogers proven business model, our operating scale and flexibility.
Diversification of end use and geographic markets combined with our strong operating track record across all stages of the economic cycle, all support achieving our long term growth aspirations.
So with those comments I'll turn it back to Bob.
The operator for to open it up for questions Michelle.
As a reminder to ask a question. Please press star one on your telephone.
Please standby, while we compile the Q&A roster.
Our first question comes from Daryl Young with TD Securities. Your line is now open.
Hey, good morning, everyone.
Good morning Dara.
First question, just with respect to your commentary around the supply chain in the near term.
How much inventory would you have in chassis would you have in order to deliver in 2023, when your production schedules for I'm, assuming we'll wrap up fairly considerably.
Yes, so we actually narrow pre invested into the inventory.
We have.
Several folks who on the call who might cover.
Other industrials such as the truck.
Eight manufacturers.
There isn't a mission here coming up and we have pre invested into those inventory levels.
And we feel very comfortable through a good portion of the.
First two quarters of next year on having proper inventory levels too.
Get underway with our bill.
And we are we've really.
Done that pre investment.
I feel very comfortable with that.
We feel very little risk in the first half of next year.
Okay great.
And then just when we think about the shoulder periods I think you mentioned that.
The new sales initiatives should help.
Drive drive better operating leverage.
How should we think though about the labor situation in the ramp up for next year, and where youre at in terms of the number of operators you have and whether there'll be headwinds to additional recruiting in that and those periods.
Yes so.
It's something we work on.
Constantly Europe Azure of making sure we have proper labor levels and our locations, obviously with the proper truck levels.
As we stated in the release and also our discussion just now we feel comfortable with where we stand now to not only complete.
<unk> four going into Q1.
With our current labor levels.
As we're wrapping up our business planning for 2023.
We are identifying the markets that we're going to continue to invest.
And drive and making sure that we are able to recruit into those markets.
For us it's not just moving the assets, but also making sure we have available labor.
And right now we're starting to see some of the CDL.
Commercial driver's license holder labor pool actually start to open up slightly it's not totally improvement slightly improving.
Where we have access to more operators as well as we've made some new initiatives and <unk>.
<unk>.
Labor pools that we've never done before.
Distantly such as military recruiting both Canada U S and several other initiatives. So we feel comfortable at this point.
And that really is tied to what happens with CDL driver demand.
Next year, but at this point, we feel comfortable.
Okay, Great and then maybe just.
Maybe just one last one on on the.
The language around recessionary conditions I'm, assuming that's more just a blanket.
Cover statement as opposed to any early indications that you are seeing any impact from from a possible recessionary environment.
Yes, that's correct, Eric I think we.
We're planning for getting our contingency planning for the event that it might happen but.
We're not necessarily seeing any impact to our business today that would suggest that.
On.
Imminently impacting the business.
Okay, great. Thanks, I'll jump back in the queue.
Please standby for next question.
Our next question comes from Michael <unk> with Scotiabank. Your line is now open.
Hey, good morning, guys.
Yes.
A quick one just a clarification Darin did you state that the pre investment in sales capacity gross margins by 200 basis point, just making sure I understood that correctly.
That's correct.
I think what we have decided that it would make sense for us to reinvest.
200 basis point impact on.
On our gross margin.
Got it Okay, just a quick one.
So when do you expect to have the 200 basis points of margin compression there related to the sales initiatives to normalize I guess, but I'm thinking given where the RPT is which is pretty high.
Do you think you can get to that normalization without necessarily building more trucks or is it purely a matter.
Got it.
Yeah, So Michael it's actually.
It is a combination so as we have done this investment in sales and marketing.
We're starting to realize.
How large the opportunity is we shared some of this on Investor day, but how large the opportunity is in front of us.
And we are uncovering a lot of new areas that previously we had not done business with or some new customers, we had not done business with.
That is helping us drive the utilization obviously RPT.
On the current fleet that we have now and couple that with our build rate and build momentum, which again, we gave pretty good clarity.
Very good clarity this quarter.
We believe they actually work in combination.
<unk>.
As the demand increases in pricing and utilization is there and then we have the ability to bring in additional trucks.
We believe we can continue to drive the business and improve.
Those sales investments or what.
It's allowing us to be able to have the.
The run rate that we're seeing and we feel comfortable with that.
Perfect that makes that makes sense that's helpful and then maybe.
If I look back to 2019.
There is still probably another two to 300 basis points to get I mean, I guess it helps us speaks to the midpoint of your long term guidance. So if I think about the direct costs now excluding sales, specifically labor fuel maintenance and local branch cost call. It.
As a percentage of revenue.
Which one of those today is generating the highest drag to gross margins when compared to 2019.
Yes, Michael ill point, you back to the presentation that we provided at our Investor day presentation, a couple of months ago.
The branch and we broke down.
Direct cost into direct branch costs and branch support costs.
The direct branch costs, which would include all the things you've described.
Operator labor <unk> fuel.
Those are back at the levels that.
Our consistent with what we saw in 2019.
The branch support costs of the areas in which we've been professionalizing the business.
Providing a little bit of pre investment to support the growth in a more meaningful manner. Those are the costs that have actually been a bit of a drag.
The business, but we don't necessarily drag on margin today, but I think to Rob's earlier point the investment in sales and marketing usually takes in broadview correcting on that it's usually around six months until that that sales professional.
Starts hitting its stride in the levels that we wanted to doing some of the investment today allows us to be able to push volume and flat operating leverage in quarters to come.
But that's exactly yes.
So some more time more trucks, okay that makes a ton of sense guys.
All right I'll leave it there thanks a lot.
Thank you as a reminder to ask a question. Please press star one on your telephone please standby for next question.
Our next question comes from Chris Doug Friedman with CIBC. Your line is now open.
Hi, Thanks for taking my question.
I just wanted to ask on on the demand that you're seeing if you can provide us with a little bit more granularity.
And if the demand is varying across your geographic areas occurs anywhere that's lagging a bit.
Or if you are seeing a lot of strength.
Okay.
Yeah, Chris I'll take that one.
So we are seeing solid demand across the entire organization.
And if you look at.
Specifically.
We don't give guidance or.
We don't provide clarity down to the local level, but regionally our eastern region of the company.
Which is really the east coast of North America has been very strong and continues to lead.
The company.
<unk>.
Performance in very very strong we're seeing as you.
You think about.
Some of our customer markets.
Areas that are investing heavily in Utah.
Utilities.
And other infrastructure spend.
Areas, especially as it relates to the Sunbelt States, we're seeing good strong growth and then lastly.
We view it as <unk>.
Some of our national accounts.
<unk>.
We are uniquely qualified to cover.
They are they are really embracing our program as it relates to large complex projects. So that in the past we might have bid on a one off basis now we're doing it.
Collectively across the organization, where if a national account had worked on a project and another area of.
Azure Badger's territory that previous work is now being shared with the future projects and basically coordinating project work across the customers are gravitating toward that and appreciating it because it makes.
Badger's value proposition that much stronger, it's one consistent supplier across their whole footprint for work so.
But it really is across the board we've seen good strength with probably the strongest in.
In the east.
Okay, that's great and then kind of on the same line of thought there.
Can you speak to how much of your business.
<unk> come from the oil and gas industry, if you've seen a significant pick up in that or if its been fairly steady.
So the oil is the pure oil and gas.
Probably about 6% of our revenue and it really hasnt changed has really picked up at all.
The overall energy sector, which would include storage and transportation that being the pipe was about 20% of our revenues and that hasn't really materially picked up at all and we've seen probably more pickup in our utility space construction space transportation space.
Energy Hasnt been the big driver in our.
Demand increase.
But rob fleets, please jump in and share your thoughts as well yes.
We haven't seen the level of work that we had seen previously.
And to be fair the.
The company had.
Purposefully.
Some previous downturns of oil and gas.
Further diversified the customer base for me, so oil and gas centric to that of oil and gas, making up a representative portion of the company's revenue, but not where it has a heavy.
Oil and gas only concentration in many of our markets.
Because of the diversification, we're not seeing the ups and downs of what happens in the oil and gas business across the business.
Smooth out some of our revenue trends.
Great. Thanks that makes a lot of sense and I'll jump back in the queue.
Thanks Christoph.
At this time there are no further questions.
I'd now like to turn the conference back to Rob <unk> for closing remarks.
Michelle I think Theres, one that just popped in.
Or at least is showing on our screen Yuri if you could open it up for you. Please and then we'll close it up yes.
Hey, Gary.
Robin Darren and Trevor.
Okay.
Hey, guys can you can you hear me okay.
We got you know, okay, sorry about that.
Im.
Just on the.
I know you haven't given.
Guidance for next year, but.
Just on the build rate.
Any hints on does the numbers start with one or two or three.
I'm just trying to think about how we should be modeling.
Next year.
Given that you had quite a few retirements.
That should be coming up for the year, so any help on that.
Maybe I'll take the retirement question first and then.
Try and bypass or your question on guidance, but sort of pointed to where our current build rate is.
On the retirement side, what we had disclosed previously was just looking at retirement using a 10 year timeframe.
10 years out from our.
The build program at the date in which the truck was put into service.
We're looking at things differently now I think we.
Our fleet strategy under lawn Brown and draft guidance, we're looking at each discrete asset engine hours the shape of the.
The shape of the truck and whether or not it would make sense.
Invest in that truck and light.
Our retirement towers, I think we're really going to make some strong efforts to be able to carve off some of the talks about.
Typically in 2023, and 2024, where the towers with the highest.
With regards to our build program.
As Rob mentioned, we don't provide guidance until Q4.
But we don't see that 2020 with changed much from the production levels that Rob mentioned in his comments.
Comment where we are.
We're making around 4% to five per week.
Please please.
I think you've covered it perfectly.
We.
We're just Yuri for obvious reasons, we're just going to hold off on real specific guidance.
Sure.
<unk> 2023, we want to keep that in the same timeframe as we released in the past.
But you can look into the MD&A and press release as well as the comments, we just made.
Start to model, some things out, but I'm going to leave that with you. We just don't we're not ready to release that yet.
Okay, but do you envision kind of continuing with that four to four to five a week.
Yes.
Yes, we're underway with that now and again, we're not giving specific guidance, but that's where we are now and look you can see what's happening with the demand in the business our end markets our utilization.
And now we have a proper.
Manufacturing leader.
Who is starting to unlock the opportunity within that plant.
Now and.
Yes.
It looks pretty solid, but again, we're not going to we.
We don't want to we're not going to give specific guidance until.
Next quarter.
Okay understood.
RPC in the quarter, I mean, I've kind of lost my bearings, a little bit with with RPT given.
The improved and where you calculate it now I'll add but.
Sure.
Was that number.
As good as it appears on the surface.
Do you see room for that in a seasonally strong quarter like Q3 could could that get into the <unk>.
Or is that kind of as high as you think you can reasonably taken in a seasonal quarter.
Maybe Gary I'll take the first part of your question on the math and then Rob can take the second part on with regard to the possible.
On the map.
Yes, we're including our operating partners in that gross revenue. So there is a bit of an uptick uptake from the.
And then being included.
Only.
Round $3000.
It isn't a material change to the overall RPT calculation thats reported and that the underlying asset utilization across the fleet has improved materially.
Rob you may want to talk a little bit about the <unk>.
Possibly yes so.
<unk>.
The makeup of our calculation for RPT.
Most everyone knows on the call but.
Make up of our pricing, our volume and our utilization and the three of them tied together represent the RPT.
And certainly there.
<unk> opportunity to continue to improve in each one of those areas as darin suggest utilization strong in certain markets.
And across the board at the company.
Solid it is strong.
<unk>.
That journey on our pricing.
<unk>.
And obviously volume.
Then as we introduce additional.
New trucks to absorb some of the demand.
You can.
Pretty quickly triangulate that there still is upside in it.
But at this point, we're hitting really solid numbers on our RPT compared to historical levels.
And I don't think Theres any one sitting at this table who can say.
Like forecast where that could be until.
Until we start to see.
The continued improvement in some of our pricing.
When you look at utilization is strong.
Still as upside, but it's strong as well. So there is some upside, but I wouldn't probably wouldn't get too exuberant on it.
Okay.
Last one for me.
Just when we think about the fourth quarter.
And some of these costs that.
That weighed on.
On your gross margin.
Are we still adding sales and marketing.
Two.
More sales and marketing cost because I thought darrin on the last call you said that.
All the investments in the business when we're done and then.
You layered in 200 basis points more on direct costs. So how do we think about Q.
Q4 in terms of sequential change.
So.
Whenever.
We made the investment we've made that investment in sales and marketing we announced our strategy in January .
And we I think we shared some of this at the Investor day, but we introduced a new compensation program and started.
Introducing new sales reps and some markets that had not had.
Sales reps in the past or that we're underpenetrated.
Did.
Larger markets.
We did that bring it in the head count for seller selling heads.
In April through.
The end of Q.
Q3.
And we are now at a point, where we are underway with our Q4 and watching the revenue trends.
But we are at this point on a let's look at how the results come in in Q4 and Q1.
And once we start to share what R. R.
Just kind of our vision 2023 is we'll make some decisions on additional head count but at this point, we're not continuing to.
Go.
Deeper on our cost and the sales and marketing, we actually want to start.
Realizing the benefits of all the investment we've made and I don't know if you want to add anything on that.
Probably the only thing I would add it is a bit of a timing difference.
The six month ramp up time for our sales professionals will be fully carrying there either furloughed.
It was a good chunk of the of the margin reduction in Q3.
With regards to the investment in the business.
Was more related to G&A.
All of the.
Largely all of the systems and capabilities that have been built.
A little bit of stuff on the fringe, which gives me a tremendous amount of confidence that the $30 million to $35 million G&A guidance that we gave at Investor day is something that is a good number for 2023.
So there is two components were there isn't and with the work done on the manufacturing side.
<unk> system, there isn't any kind of material investments, we need to making the business other than human capital and the professionalized issue Thats books.
Okay. Thanks for squeezing me in at the end.
Got it.
Yes.
I think they are actually maybe one more behind Europe .
Thank you.
As a reminder to ask a question. Please press star one one on your telephone please standby for next question.
Our next question comes from Trevor Reynolds with acumen capital. Your line is now open.
Hey, guys apologies, if I'm a little bit late getting on the call. So if this has already been touched on.
Can touch base later, but just.
I'm, just wondering on seasonality and early indications I guess in kind of the success.
The impact of the National account strategy and.
Kind of what Youre seeing.
Early in Q4.
All I'll cover at high level, and if Darren wants to add something he may. He is I think the biggest cheerleader of our national accounts program and a big fan of it.
I will share with everyone on the call and we went pretty deep on national accounts during Investor day at the end of September there Trevor.
And.
Our initial.
Results from our investment across the wholesale spectrum as national accounts is actually yielding.
Faster quicker results.
We're darrin was referencing a moment ago the ramp up time.
Of around six months for one of our local sales reps, our national account customers Trevor.
It's almost as if they've been waiting for someone to come in and rollout of National accounts program within our business and.
And so.
And that has shown.
Promising.
<unk>.
Results.
No.
A portion of the business, where we are.
Very very enthusiastic about.
And.
Obviously, we're not going to break apart how much volume, we're doing a national accounts or what that improvement.
The improvement is but we gave a couple of examples some discussion points of Bobby loved shared during the Investor day, and anyone who wants to kind of see that they can take a quick peek at that deck or color Trevor or Trevor Carson.
And Trevor can share that with you want to add anything.
Oh.
I apologize I missed the seasonality referenced as well.
Your question regarding the seasonality.
<unk>.
It is our belief we continue to believe that.
That.
That national account business and that customer base.
Well help us lift up those shoulder seasons, and really offset the seasonality that the company has historically had.
We don't know as we sit here and share on this call. We don't know what that will look like at this point because we've just made the investment.
About six seven months ago.
As we see that investment on board, we're very encouraged off of Q3 and.
And like what we're seeing.
We have to let it play out and I don't know if you want to add anything else there.
Okay.
So that's that's our quick thoughts on that.
But it's reasonable to expect globe, what we will see some of that impact in Q4 and Q1.
That's what we are making the investment on.
Again, we're in some.
Pretty exciting territory as far as what we're seeing and the investment we've made.
The end markets, we're touching that we haven't touched before.
And it would lead us to believe that.
The investment we've made.
Going to help lift those shoulder seasons and that was the strategy we built.
We.
We are at this point, though are underway with it we obviously don't give guidance within our current quarter that we're in.
It really really talk much about that at all but.
We're underway with strategy and.
We believe in the strategy, we're not backing off of it let's put it that way.
Alright, Thanks for taking my question guys.
Thank you.
At this time I am showing no further questions.
I would now like to turn the conference back to Rob Black Dark for closing remarks.
Thank you Michelle.
Thank you on behalf of all of US here about your thanks to our customers.
<unk> suppliers and shareholders for your ongoing support.
That helps to drive badger's success.
Operator, you may end the call. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
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