Q2 2024 Twin Disc Inc Earnings Call
[music].
Operator: Ladies and gentlemen, thank you for standing by. I would like to welcome everyone to the Twin Disc Incorporated Fiscal Second Quarter 2024 conference call. At this time, all lines have been placed on mute to prevent any background noise.
Ladies and gentlemen, thank you for standing by I would like to welcome everyone to the twin disc incorporated fiscal second quarter 2020 full conference call. At this time for lots have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, please press the star followed by the number 1 once again.
You got to ask a question during this time.
What about the number one on your telephone keypad, if he'd like to withdraw your question. Please press the star followed by the one once again.
Operator: Thank you. I will now hand the call over to Mr. Josh Knutson, Chief Financial Officer. You may begin your conference. Good morning, and thank you for joining us today to discuss our fiscal 2024 second quarter results. On the call with me today is John Batten, Twin Disc CEO. I would like to remind everyone that certain statements made during this conference call, especially statements expressing hopes, beliefs, expectations, or predictions for the future, are forward-looking statements. It is important to remember that the company's actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statement is contained in the company's annual report on Form 10-K, copies of which may be obtained by contacting either the company or the SEC.
I'll now hand, the call over to Mr. Jeff <unk>, Chief Financial Officer, you May begin your conference.
Yeah.
Good morning, and thank you for joining us today to discuss our fiscal 2024 second quarter results.
Policy today is John Batten twin the CEO.
I'd like to remind everyone that certain statements made during this conference call, especially statements expressing hopes beliefs expectations or predictions for the future are forward looking statements.
It is important to remember that the company's actual results could differ materially from those projected in such forward looking statements.
Information concerning factors that could cause actual results to differ materially from those in the forward looking statements.
Are contained in the company's annual report on Form 10-K copies of which may be obtained by contacting the company or the SEC.
Operator: Any forward-looking statements that are made during this call are based on assumptions as of today, and the company undertakes no obligation to publicly update or revise these statements to reflect subsequent events or new information. During today's call, management will also discuss certain non-GAAP financial... For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. By now, you should have received the news release which was issued this morning before the market opened. If you have not received a copy, please call our office at 262-638-4000, and we will send you a copy.
Any forward looking statements that are made during this call are based on assumptions as of today and the company undertakes no obligation to publicly update or revise these statements to reflect subsequent events or new information.
During today's call management will also discuss certain non-GAAP financial measures.
A definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.
By now you should have received the news release, which was issued this morning before the market opened.
If you have not received a copy please call our office at 206 Q3.
384000, and we will separately.
February.
John H. Batten: Now I'll turn the call over to John. Good morning, everyone, and welcome to our fiscal 2024 second quarter conference call. Let's begin today's call with some highlights. We continued our solid momentum in the second quarter, delivering profitable growth by generating historically high cash from operations. These results were driven in large part by strong operational execution by our team coupled with our continued focus on working capital improvement. We are seeing ongoing strength both in marine and propulsion and land-based transmission, supporting 15.2% year-over-year sales growth to continue our trend of double-digit top-line expansion in fiscal 2024. We also delivered solid gross margin expansion, which improved 140 basis points to 28.3%. We're also seeing continued backlog growth as our teams work to capture stable and market demand.
Now I'll turn the call over to John.
Good morning, everyone and welcome to our fiscal 2024 second quarter Conference call.
To begin today's call with some highlights.
We continued our solid momentum in the second quarter delivering profitable growth by generating historically high cash from operations.
These results were driven in large part by strong operational execution by our teams coupled with our continued focus on working capital improvement.
We are seeing ongoing strength, both in marine and propulsion and land based transmission supporting 15, 2% year over year sales growth to continue our trend of double digit top line expansion in fiscal 2024. We also delivered solid gross margin expansion, which improved 140 basis points to 28, 3%.
We're also seeing continued backlog growth as our teams work to capture stable end market demand. One particular highlight has been significant increase in orders for work boat Marine transmissions in Asia Pacific a return to activity in our market after cyclical softness in the offshore Asian markets.
John H. Batten: One particular highlight was a significant increase in orders for work boat marine transmissions in Asia-Pacific, a return to activity in a market after cyclical softness in the offshore Asian market. Moving on to results by product, sales in marine and propulsion systems increased 29%, driven by growing activity in global commercial markets. We are seeing further increases in defense spending driving patrol boat projects, which we expect to continue given the current geopolitical turmoil. That backlog remains at record levels, rising 6% sequentially and supported by the success of the VET Enroll Partnership.
Moving on to results by product group sales in Marine propulsion systems increased 29% driven by growing activity and global commercial markets. We are seeing further increases in defense spending driving patrol boat projects, which we expect to continue given current geopolitical turmoil.
Backlog remains at record levels, rising, 6% sequentially and supported by the success of the vet enrollment partnership.
John H. Batten: VET inventory has increased in the near term as we prepare to meet increased demand heading into the second half of the fiscal year. Sales grew 8% year-over-year, driven by rising activity in the oil and gas market. We're encouraged to see our first new unit orders in North America within oil and gas and expect further strength for this part of the business in the coming quarters. ARF has also performed well, with strong demand for these transmissions supporting a continued trajectory of backlog growth. Looking broadly at the segment, orders are continuing to trend upwards, and we have seen early signs of improvement in spare parts orders after previously reporting a pullback due to end market uncertainty in the first quarter. Our industrial segment has remained pressured by softness amongst industrial OEM customers, with sales declining 13% versus the prior year.
Inventory has increased in the near term as we prepare to meet increased demand heading into the second half of the fiscal year.
Under the land based transmission business sales grew 8% year over year, driven by rising activity in the oil and gas markets. We are encouraged to see our first new unit orders in North America within oil and gas and expect further strength for this part of the business in the coming quarters. <unk> has also performed well with a strong demand for these transmission supporting continue.
Trajectory of backlog growth.
Looking broadly at the segment orders are continuing to trend upwards and we have seen early signs of improvement in spare parts orders. After previously reporting pulled back due to end market uncertainty in the first quarter.
Our industrial segment has remained pressured by softness amongst industrial OEM customers with sales declining 13% versus the prior year. We have continued to see sluggish demand for lower content Commoditized products, where demand has remained steady for sophisticated higher content products.
John H. Batten: We have continued to see sluggish demand for lower-content, commoditized products, while demand has remained steady for sophisticated, higher-content products. Despite this near-term softness, we remain focused on capturing opportunities to partner with major domestic OEMs on a range of products. Next, I'll speak to inventory and backlog. Our backlog has continued to increase, driven by solid demand across our end markets, along with the impact of supply chain improvements made over the past year to enable faster shipment deliveries. We're also seeing a temporary increase in inventory as a percentage of backlog, mainly due to the near-term increase in inventories mentioned earlier. That said, we expect to see inventories fall in the second half of the fiscal year as we work through our current backlog and remain focused on driving inventories as a percentage of backlog lower in the coming quarters. I'd like to briefly address our long-term strategy before Jeff takes us through the financial details. We aim to position Twin Disc as a leading provider of hybrid and electrification solutions for marine and off-highway land-based applications.
Despite this near term softness we remain focused on capturing opportunities to partner with major domestic Oems on a range of products.
Next I'll speak to inventory and backlog our backlog has continued to increase driven by solid demand across our end markets along with the impact of supply chain improvements made over the past year to enable faster shipment deliveries. We're also seeing a temporary increase in inventory as a percentage of backlog mainly due to the near term increase in.
Inventory as mentioned earlier.
We expect to see inventories fall in the second half of the fiscal year as we work through our current backlog and remain focused on driving inventory as a percentage of backlog lower in the coming quarters.
I'd like to briefly address our long term strategy before Jeff takes us through the financial detail.
We aimed to position twin disc is a leading provider of hybrid and electrification solutions for marine and off highway land based applications in recent quarters. We have made great strides in rationalizing and modernizing our business, helping deliver improved shipments were lower inventory cost and lead times to create better results for all stakeholders.
We are maintaining our focus on controls and systems integration shifting our business into new avenues that will bring us profitable growth with the support of our strong balance sheet. We are also continuously evaluating M&A opportunities to grow our business within the industrial and marine technology sectors, both of which ample opportunities for us to expand our <unk>.
John H. Batten: In recent quarters, we have made great strides in rationalizing and modernizing our business, helping deliver improved shipments while lowering inventory costs and lead times to create better results for all stakeholders. We are maintaining our focus on controls and systems integration, shifting our business into new avenues that will bring us profitable growth. With the support of our strong balance sheet, we are also continuously evaluating M&A opportunities to grow our business within the industrial and marine technology sectors, both of which provide ample opportunities for us to expand our offerings in the hybrid and electrification space. With that, I'll now turn it over to Jeff to discuss the financials. Jeff.
Offerings, and the hybrid and electrification space.
With that I'll now turn it over to Jeff to discuss the financials Jeff.
Thanks, John Good morning, everyone, we delivered sales of $73 million for the quarter up $9 6 million or 15, 2% from the prior year period as overall demand remains strong.
Net income attributable to <unk> for the second quarter was 900000 or <unk> <unk> per diluted share compared to $1 8 million or <unk> 13 per diluted share in the second quarter of fiscal 'twenty three.
Gross profit margin increased to 28, 3% compared to 26, 9% during the prior year period, and gross profit increased 21, 3% to $27 million.
Jeffrey S. Knutson: Thanks, John. Good morning, everyone. We delivered sales of $73 million for the quarter, up $9.6 million or 15.2% from the prior year period, as overall demand remains strong. Net income attributable to Twin Disc for the second quarter was $900,000 or $0.07 per diluted share compared to $1.8 million or $0.13 per diluted share in the second quarter of fiscal 23. Gross profit margin increased to 28.3% compared to 26.9% during the prior year period, and gross profit increased 21.3% to $20.7 million. This improvement reflects the benefit of prior pricing actions, continued easing of supply chain headwinds, a favorable product mix, and successfully executing our operational playbook. Marine and propulsion systems reported double-digit growth, and land-based transmissions reported 8% growth, while industrial sales declined compared to the prior year period.
This improvement reflects the benefit of prior pricing actions continued easing of supply chain headwinds.
A favorable product mix and successfully executing our operational playbook.
Marina propulsion systems reported double digit growth in land based transmissions reported 8% growth, while industrial sales declined compared to the prior year period.
Looking at topline distribution across geographies sales continued to increase across the Asia Pacific and European regions compared to the prior year supported by robust demand, while north American sales decline.
We continue to strengthen our balance sheet through the solid cash generation delivered in the second quarter, we reduced net debt by $21 7 million to negative $3 3 billion compared to the prior year period and ended the quarter with a cash balance of 21 million approximately $7 5 million higher versus the prior year period.
EBITDA decreased to $5 $5 billion from $7 million during the prior year period due to a $4 $2 million prior year gain on the sale of a facility recorded in the second quarter of 2023.
We continue to decrease our leverage ratio this quarter to below negative six putting us in an excellent position to invest their business, while executing inorganic growth opportunities.
As noted earlier gross profit margin for the second quarter increased to 28, 3% extending approximately 140 basis points for the prior year period.
Jeffrey S. Knutson: Looking at top line distribution across geography, sales continue to increase across the Asia-Pacific and European regions compared to the prior year, supported by robust demand, while North American sales declined. We continue to strengthen our balance sheet through the solid cash generation delivered in the second quarter. We reduced net debt by $21.7 million to negative $3.3 million compared to the prior year period and ended the quarter with a cash balance of $21 million, approximately $7.5 million higher versus the prior year period. EBITDA decreased to $5.5 million from $7 million during the prior year period due to a $4.2 million prior year gain on the sale of a facility recorded in the second quarter of 2023.
Again due to the benefit of pricing actions continued easing of supply chain headwinds a favorable product mix and successful execution of our operational playbook.
Our improved supply chain has continued to enable stronger shipments. However, we have faced some currency headwinds and higher labor costs with it.
That being said, while it would be they spend has increased nominally it has decreased as a percentage of sales as we continue to grow our business.
Yes.
Now I'd like to capital allocation in line with the additional priority specified in our capital allocation framework, given our low debt level, we are exploring M&A opportunities with a specific emphasis on marine technology industrial as a hybrid electric sector as John mentioned.
Simultaneously, we are making strategic investments within the company, including research and development.
Fashion into new geographic areas and continued strengthening of our marketing efforts.
Jeffrey S. Knutson: We continue to decrease our leverage ratio this quarter to below negative 0.6x, putting us in an excellent position to invest in our business while executing inorganic growth opportunities. As noted earlier, gross profit margin for the second quarter increased to 28.3 percent, expanding approximately 140 basis points from the prior year period. Again, due to the benefit of pricing actions, continuing the easing of supply chain headwinds, a favorable product mix, and successful execution of our operational playbook. Our improved supply chain has continued to enable stronger shipments. However, we have faced some currency headwinds and higher labor costs within ME&A.
As always we are pleased to consistently return capital to shareholders through repurchases and dividend payments.
We will continue to evaluate our capital allocation strategy and priorities adjusting to changes in the economic landscape in their operating environment as they evolve.
I'd like to now turn the call back over to John to share some closing remarks.
Thanks, Jeff before we open the line for questions I'd like to highlight a few key takeaways from our quarterly results.
In summary, we are seeing stable end market demand advancing our momentum of double digit revenue growth robust margin expansion and cash generation. We are focused on maintaining the operational improvements that have supported these results, including disciplined working capital management.
Despite lingering macroeconomic uncertainty, we hold a cautiously optimistic outlook towards the remainder of our fiscal year, given strengthening demand levels in our end markets. Our consistent performance will continue to strengthen our financial profile, giving us the ability to work through potential challenges while pursuing growth opportunities.
Jeffrey S. Knutson: That being said, while M&A spend has increased nominally, it has decreased as a percentage of sales as we continue to grow our business. Now on to capital allocation. In line with the additional priorities specified in our capital allocation framework, given our low debt level, we are exploring M&A opportunities with a specific emphasis on marine technology, industrial, and the hydroelectric sector, as John mentioned.
I'd like to thank all of our teams for their hard work and commitment to supporting our business. This quarter. We look forward to sustaining this progress as we drive to win this forward and generate long term value for our shareholders.
That concludes our prepared remarks, Jeff and I will now be happy to answer your questions.
Jeffrey S. Knutson: Simultaneously, we are making strategic investments within the company, including research and development, expansion into new geographic areas, and continued strengthening of our marketing efforts. As always, we are pleased to consistently return capital to shareholders through repurchases and dividends. We will continue to evaluate our capital allocation strategy and priorities, adjusting for changes in the economic landscape and our operating environment as they evolve. I'd like to now turn the call back over to John to share some closing remarks. Thanks, Jeff.
At this time I would like to remind us teleconference participants in order to ask a question. Please press the star followed by the number one on your telephone keypad, who posted just amendments composite Q&A Rostock.
Okay.
Thank you. Our first question comes from the line of Simon <unk> from Gabelli funds. Please go ahead.
Good morning, guys.
Hey, guys good morning.
Okay.
First question.
Yes.
Some nice growth in your land based transmission business.
John H. Batten: Before we open the line for questions, I'd like to highlight a few key takeaways from our quarterly results. In summary, we are seeing stable end market demand advance our momentum of double-digit revenue growth, robust margin expansion, and cash generation. We are focused on maintaining the operational improvements that have supported these results, including disciplined working capital management.
How much of that was oil.
Oil patch.
Yes.
I would say the oil patch was relatively consistent.
I think yes, I think it was probably split between our and our and our oil patch on the transmission side.
So okay.
<unk> hundred $57 million 8 million.
I think thats about right yes.
Okay. Now you say you mentioned that you saw higher activity or do we see the first new equipment order from that North America is that.
John H. Batten: Despite lingering macroeconomic uncertainty, we hold a cautiously optimistic outlook for the remainder of our fiscal year, given strengthening demand levels in our end markets. Our consistent performance will continue to strengthen our financial profile, giving us the ability to work through potential challenges while pursuing growth opportunities. I'd like to thank all of our teams for their hard work and commitment to supporting our business this quarter.
Is that for the new E. Frac was that for the diesel diesel base.
<unk>.
Yes, Simon the new unit orders were for traditional diesel frac.
We are still awaiting the first Po.
For the E frac.
I am hoping that happens yet this quarter.
But so far all of the new unit orders and obviously all the spare parts orders.
Remained for North America, and Asia and.
Our business in Asia keeps keeps keeps chugging along at a very.
Operator: We look forward to sustaining this progress as we drive Twin Disc forward and generate long-term value for our shareholders. That concludes our prepared remarks. Jeff and I will now be happy to answer your questions. At this time, I would like to remind our teleconference participants that, in order to ask a question, please press the star followed by the number one on your telephone keypad.
At a very good rate.
This quarter compared to a year ago.
Okay.
$8 million from data from the oil patch is that is that mostly.
You did mentioned some new units going to Asia is that what you were taught consumables or.
Or how does that break down between consumables and equipment.
Operator: We'll pause for just a moment to compile the Q&A roster. Thank you. Our first question comes from Simon Wong from Gabelli Funds. Please go ahead. Good morning, guys. Morning time.
So I would say in the quarter.
The revenue growth was more in new units to Asia, and a little bit less on spare parts. So the mix of new units.
Fair parts was higher in the second quarter than it had been in the previous quarters. So we saw a little bit of slowdown in rebuild activity and an uptick in new unit activity.
John H. Batten: First question: Yes, you saw some nice growth in your land-based transmission business. How much of that was from the oil patch? I would say the oil patch was relatively consistent. I think it was probably split between our ARF and our ARPA on the transmission.
Okay.
A new fact, FERC offering you're still waiting for the first purchase order.
What's been the feedback from your customers.
John H. Batten: So 50-50, so about $7 million, $8 million. I think that's about right, yeah. Okay, now you say you mentioned that you saw higher activity or you received your first new equipment order from North America. Is that for the new E-Frac, or is that for the diesel-based transmission?
The feedback has been great. It's been it's the testing has gone extremely well.
I'll be honest I'm surprised we haven't had the order yet, but I think we're just working out some details and some financing for the customer and that's where we stand.
We remain ready and we're geared up for production.
John H. Batten: Yes, Simon, the new unit orders were for traditional diesel frack. We are still awaiting the first PO for the e-frack. I'm hoping that happens this quarter.
We can react very quickly.
Okay got it and then.
And that you saw some really nice geographic expansion growth.
Welcome geographic scratching last year it looks like it continued this quarter how much more room is there to.
John H. Batten: But, you know, so far, all the new unit orders and, obviously, all the spare parts orders remain for North America and Asia. And our business in Asia keeps chugging along at a very good rate this quarter compared to a year ago. Okay, now that $8 million from the oil patch, is that mostly, I mean, you did mention some new units going to Asia, is that more geared towards consumables, or how's that breakdown between consumables and new? So, I would say in the quarter, the revenue growth was more on new units going to Asia and a little bit less on spare parts. So, the mix of new units, Fair Parts, was higher in the second quarter than it had been in the previous quarter. So we saw a little bit of a slowdown in rebuild activity and an uptick in new unit activity. Oh, okay.
To expand geographically.
Quite a bit there is I mean, we've just scratched the surface in North America, and Asia, we had shipments to Australia.
Last fiscal year actually.
Trying to think that might have been the first quarter.
But again, just scratching the surface, particularly in the elite product line the combination there.
The role of the design.
<unk> and.
And propeller.
The Mega yacht market. They don't just build in Europe, they build around the world. So we're looking to expand that.
So we have actually we do have some just supply I would say production constraints in the Netherlands that we're trying to solve here in the U S. So once we.
Get that.
John H. Batten: And then your E-FRAC offering, you're still waiting for the first purchase order; what's the feedback from your customers? The feedback has been great, the testing has gone extremely well. I'll be honest; I'm surprised we haven't had the order yet, but I think we're just working out some details and some financing for the customer, and that's where we stand, but we remain ready, and we're geared up We could react very quickly, and we got it. And then, in VET, you saw some really nice geographic expansion growth last year, and it looks like it continues this quarter. How much more room is there to expand geographically? Quite a bit. I mean, we've just scratched the surface in North America and Asia.
Behind Us I think we'll see some more geographic expansion as well.
But we've got some things to work out so that we can grow the top line.
Production wise capacity wise.
Okay.
Alright, a couple of questions for Jeff we saw gross margin expand nicely year over year, but it did take a step back from the first quarter.
How does how do you see gross margin progressing toward the rest of the year.
Yes, I think it is going to be right around the range between Q1, and Q2 and its depending on mix like John mentioned, our aftermarket mix, especially oil and gas aftermarket in Q2.
Bit lower than we had seen in previous quarters and that has a little bit of a drag on margin.
John H. Batten: We had shipments to Australia last fiscal year; trying to think, that might have been the first quarter. But again, just scratching the surface, particularly in the elite product line, the combination of the role of design at Ruster and Propeller. You know, the megayacht market, they don't just build in Europe; they build around the world, so we're looking to expand that. So, you know, we actually, we do have some, just some plight, I would say production constraints in the Netherlands that we're trying to solve here in the U.S., so once we, you know, get that behind us, I think we'll see some more geographic expansion as well.
We did see an uptick in orders as we closed out the quarter. So that was a positive sign.
I think it's going to be in this range.
Kind of what we've said before.
In the high <unk> trying to get to 30.
And what we would expect.
Okay. One more question, if I could sneak one in Louisiana.
Opex for the full year.
Capex outlook for the full year.
Yes, I think the $10 million, we've been pretty consistently.
Targeting $10 million I think we've got.
Attract a run rate so far that gets us pretty close so unlike maybe some previous years, where it was really backend loaded I think we've got orders in place to get it right around that 10 billion, maybe a little bit less.
John H. Batten: But, you know, we've got some things to work out so that we can grow the top line, production-wise, capacity-wise, and John Bolton. Thank you. Thank you. Thank you. Thank you.
Okay. Thanks, guys.
Yes, there is more on the order, but the lead times for machine tools.
Gear grinders Theres still.
Still out over 12 months. So we have we have a big machine tools on order, but they're not coming in until next fiscal year.
Jeffrey S. Knutson: We saw gross margin expand nicely year over year, but it did take a step back from the first quarter. How do you see Gross Bargain progressing for the rest of the year? Yeah, I think it's going to be right around the range between Q1 and Q2, and it's depending on mix, you know, like John mentioned, our aftermarket mix, especially oil and gas aftermarket, in Q2 is a little bit lower than we've seen in previous quarters, and that that has a little bit of a drag on margin.
Okay got it alright, great. Thank you guys.
Thanks Simon.
As a reminder, if you'd like to ask a question. Please press the star followed by the one on <unk>.
Our next question comes from the line of Mike <unk> from Neuberger. Please go ahead.
Hey can you hear me guys, it's actually Randy.
Hey, Ravi around yes.
Great.
So if you use the <unk>.
Q2.
Good afternoon of EBITA, how would you guys expect short in the second half.
Jeffrey S. Knutson: We did see an uptick in orders as we closed out the quarter, so that was a positive sign. So, I think it's going to be in this range and kind of what we've said before. You know, in the high 20s, trying to get to 30, which we would expect.
<unk> to behave.
Understood.
Additional top line.
Yes, I think we will I think it will be up.
<unk>.
I think we've been hovering around.
$30 million trailing 12 month.
EBITDA I think.
I think we will.
Growth through the second half so getting through the second half back up to like seven $5 million to $8 million.
Jeffrey S. Knutson: Okay, one more question, if I can sneak one more in. What's your CapEx for the full year, and your CapEx outlook for the full year? Yeah, I think 10 million.
Okay great.
And given the backlog.
What are you hearing about the end markets you guys.
Jeffrey S. Knutson: We've been pretty consistently, you know, targeting 10 million. I think we've got a track run rate so far that gets us pretty close. So unlike maybe some previous years where it was really back-end loaded.
Assuming you feel pretty good about the second half growth.
Revenues year over year is that the case and so I was wondering about.
And the next year, if you have any sort of visibility on continued topline growth.
Jeffrey S. Knutson: I think we've got orders in place to get us right around that 10 million, maybe a little bit less. Okay, thank you guys. Yeah, there's more on order, but the lead times for machine tools, gear grinders, they're still out over 12 months. So we have big machine tools on order, but they're not coming in until next fiscal year. Okay, got it.
Zero.
Yes.
Yes, Randy it's John I think we given our backlog and what we are.
What we saw in orders in the second quarter and some feedback we're getting in the first quarter.
Obviously pretty optimistic the backlog is there for the second half.
Do very well, it's just a question of <unk>.
Jeffrey S. Knutson: All right, great. Thank you, guys. Thanks, Simon. As a reminder, if you'd like to ask a question, please press the star followed by the 1 on your telephone. Our next question comes from Mike Green from Newburger. Please go ahead. Hey, can you hear me guys? It actually ran.
Christine surprises in the supply chain things taking longer to get to us.
Because of concerns in the middle East and shipping taking longer.
But the backlog there to have a very nice second quarter.
Yes.
We're reading everything that you're reading about soft landing recession.
In our markets the second half of the year, the beginning of our next fiscal year.
Operator: Hey, Ren. Oh, hey, Ren. Yes. How are you? Great. Um... So if we use the Q2, like five and a half million of EBITDA, how would you guys expect the second half? Quarters to the eighth.
So far Ram or orders.
And what we're hearing from our customers there is a little bit of that but we're also seeing some optimism in markets that had been quiet for a long time and I mentioned.
Jeffrey S. Knutson: I'm assuming we're getting to the top. We see the additional top lines. Yeah, I think we'll be up. You know, I think we've been hovering around. You know, 30 million, trillion, 12 months, EBITDA. I think, you know, I think we'll grow through the second half. So getting, you know, through the second half back up to like seven and a half days.
In my comments, the Asian Marine market, particularly.
Whether it's for mining seem to be doing very well.
I think it's for US it's too soon to tell but.
We're probably a little bit more optimistic than.
And then most going into our fiscal 'twenty five.
Okay, great well, let's leave it there and I'm still trying to visit with you guys with.
John H. Batten: Okay, great. And given the backlog and what you're hearing about end markets, do you guys, I'm assuming you feel pretty good about the second half, you know, having growth revenues year over year. Is that the case? And I was wondering about, you know, looking into next year, if you have any sort of visibility of continued top line growth year on year? Yeah, Rand, it's John.
When the weather gets a little better but great work on this.
Positioning the company.
Alright, Thanks Ram.
Thank you ladies and gentlemen, we have no further questions. At this time, we will conclude today's conference call. We thank you for participating and you may now disconnect.
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John H. Batten: I think we, given our backlog and what we're, you know, what we saw in orders in the second quarter and some feedback we're getting in the first quarter, I'm obviously pretty optimistic. The backlog is there. The second half did very well; it's just a question of the unforeseen surprises in the supply chain, things taking longer to get to us because of concerns in the Middle East and shipping taking longer. But the backlog is there to have a very nice second quarter. We're reading everything that you're reading about, you know, a soft landing, recession in the, you know, in our markets, the second half of the year, the beginning of our next fiscal year, so far. And what we're hearing from our customers, there's a little bit of that, but we're also seeing, you know, some optimism in markets that have been quiet for a long time. And I mentioned in my comments that the Asian marine market, particularly tugs, you know, whether it's for mining, seem to be doing very well. So, I think it's for us, it's too soon to tell, but we're probably a little bit more optimistic than most going into, you know, our fiscal 25.
Yes.
Yes.
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Yes.
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Thanks.
Yes.
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Okay.
Okay.
Yes.
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Yeah.
Okay.
[music].
John H. Batten: Okay, great. Let's leave it there. I'm still trying to get up and visit with you guys when the weather gets a little better.
Operator: But great work on repositioning the company. All right. Thanks, Rand. Thank you, ladies and gentlemen. As we have no further questions at this time, we will conclude today's conference call. We thank you for participating, and you may now disconnect.
Okay.
Yes.
Okay.
Yes.
Thank you.
Sure.
[music].
Yes.
Yes.
Yes.